South Sudan: Gov't Condemns Oil 'Stealing', Says Khartoum Has No Control Over Resources

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Uma Julius

15 January 2012

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Juba — An official from the South Sudanese government on Sunday condemned Khartoum's decision to confiscate its crude oil, adding that the transitional agreements South Sudan singed this week with the foreign oil companies gives it, legally and formally, full control over its resources.

Pagan Amum, the Secretary General of the ruling Sudan People Liberation Movement (SPLM) in South Sudan, was responding to earlier reports that Khartoum had instructed a foreign oil company to load 650,000 barrels of South Sudan's crude oil onto its vessel.

Petrodar Operating Company (PDOC) told South Sudanese officials on Saturday that it was ordered by the Sudanese government to load the oil, estimated at $65 million, adding that the process was "required" by the Khartoum government, "non-negotiable" and to be overseen by its national security.

"The Government of Sudan's control over South Sudan's resources has formally and legally come to an end with the signing of the contracts [with foreign oil companies]," Amum told journalists in South Sudan capital of Juba.

Both South Sudan's government and the foreign oil companies, he said, agreed to establish new joint operating companies and as a "rule with limited exceptions, to not use South Sudanese oil revenues to finance oil investments and operations in outside South Sudan."

"The signing of the contracts between South Sudan and the oil companies also strengthens our position at the negotiations with our neighbors on the outstanding issues being discussed," said Amum who is South Sudan's chief negotiator at the Addis Ababa talks.

As part of South Sudan's strategy, however, Amum noted that his government has embarked on the process of having the Petroleum Bill put in place, while efforts are also underway to establish the much-needed Petroleum Revenue Bill. The latter, he said, will oversee how revenues realized from oil sales are utilized.

On Saturday, South Sudan's petroleum and mining ministry lauded foreign oil companies for "consistently" defying alleged orders by Khartoum to divert all South Sudan's oil to the Sudan-based El Obeid and Khartoum refineries.

The Sudanese government, the ministry says, also blocked the export of any oil entitlement from South Sudan's territory since last December, stressing that its actions were justified in efforts to secure payments in kind for fees South Sudan incurs in transportation and processing its oil through infrastructures located in Sudan.

But Khartoum's argument, according to the ministry, suffered a "fatal blow" when foreign oil companies sent a letter to both governments, clearly acknowledging that South Sudan has since its independence promptly paid the required oil fees, contrary to Sudan's claims.

"The timing of this letter and the GOS's new instruction to PDOC cannot be viewed in isolation from one another," said petroleum minister Stephen Dhieu Dau.

In Khartoum, the head of the Sudanese delegation to the Addis Ababa negotiations Idriss Mohamed Abdel-Gadir said that his government owes the south $5 billion while Juba owes it $6 billion.

Abdel-Gadir went on to say that what Khartoum seized in oil does not equate what South Sudan owes in arrears. He said that resolution of this issue can only be achieved on the negotiation table.

This month Sudanese president Omer Hassan al-Bashir accused South Sudan of not negotiating in good faith and as such Khartoum decided to "unilaterally" to take transit fees forcibly in the form of oil.

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