South Sudan keeps oil pipeline shut

South Sudan has fully shut down oil output in a row with Sudan over export transit fees and will only restart after a broader deal on issues including border security and the disputed region of Abyei, its oil minister said on Sunday.

South Sudan took about three-quarters of Sudan's oil output when it seceded in July, but still needs pipelines running through its northern neighbour to export its crude. The two have not agreed on a transit fee.

The new nation said on Jan. 20 it would shut down production after Khartoum started confiscating some oil in lieu of what it said were unpaid fees.

South Sudan's oil output - which officials last put at about 350,000 barrels per day in November - was completely shut down on Sunday, Minister of Petroleum and Mining Stephen Dhieu Dau told Reuters in Juba.

Oil is the lifeline of both countries' economies, accounting for about 98 percent of South Sudan, one of the world's poorest nations. China is the biggest buyer, getting about 5 percent of all its crude imports last year from Sudan, north and south.

The two countries' presidents met on the sidelines of a meeting of East African officials in Ethiopia on Friday, but failed to resolve their differences.

COMPREHENSIVE DEAL NEEDED

“Oil production will restart when we have a comprehensive agreement and all the deals are signed. Sudan must recognise the 1956 border, which means they must give back all the areas under occupation,” he said, referring to an internal boundary used around the time of Sudan's independence.

Sudan has already sold at least one tankerload of seized South Sudanese crude, but said on Saturday it would free other tankers to help defuse the row.

Dau said the four cargoes in question had not left the port yet, but that South Sudan's agent said it had been told to prepare documentation so it was possible that they would leave later on Sunday or on Monday.

South Sudan was “committed to negotiations” but first Khartoum “must take some steps”, he said.

“First they must release the cargoes, and the stolen crude that was lifted by force must be returned to us, and any deal must be tied to the issues of the border and Abyei, and they must stop sponsoring militias in South Sudan,” he said.

“This deal must be overseen by the international community. We will restart operations when we agree all these issues. These issues must be resolved first.”

South Sudan's population voted overwhelmingly to secede in a January referendum, held under the terms of a 2005 peace deal that ended decades of devastating civil war between Sudan's north and south.

Apart from oil, the two have yet to agree on issues including debt, the position of the shared boundary and control of the disputed territory of Abyei. Both sides accuse each other of backing rebels on the other side of the border. - Reuters