South Sudan says oil output stalled after Sudan's demands - Platts

Cape Town (Platts)--21Nov2012/749 am EST/1249 GMT

South Sudanese President Salva Kiir has said the restarting of oil production has been delayed after rival Sudan made new demands in security talks.

Kiir, speaking Tuesday during the ceremonial laying of a foundation stone for a new oil refinery in Upper Nile state, said that former civil war enemies in Khartoum wanted Juba to denounce old comrades still fighting inside Sudan, AFP reported.

"We were supposed to restart oil production on November 15," Kiir said. "Khartoum is looking for an excuse not to restart the oil.

"Suddenly Khartoum changed their minds, saying that we must denounce the Nuba Mountains and Blue Nile first," he said, referring to Sudan's civil war border regions, where renewed conflict broke out over a year ago.

Article continues below...

Request a free trial of: Oilgram News
	Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more.

South Sudan shut off around 350,000 b/d in January after failing to agree a transit fee with Sudan, crippling both economies. Months of military confrontations followed, with South Sudan in April seizing the disputed oil-producing town of Heglig on the border.

After independence last year, Juba inherited two-thirds of the unified country's 500,000 b/d oil production capacity, but the pipelines and processing facilities remained in the north.

Last month, however, the two countries, under the facilitation of the African Union High Level Implementation Panel, reached a transit fee deal.

They also set up a demilitarized border zone along the border of Sudan-South Sudan but differences remain over five disputed areas.

The US said it was disappointed in delays in the resumption of oil production.

"This denies much needed revenue to both economies, and we urge both parties to resume production while they work to resolve other bilateral issues and, along with the African Union, urgently stand-up the Petroleum Monitoring Committee," US State Department spokeswoman Victoria Nuland said in a statement.

The US called on Sudan and South Sudan to immediately reconvene and recommit to the agreement signed by both sides in Addis Ababa on September 27.

"Allowing this unresolved issue to impede implementation of the other agreements threatens the stability of both countries."

--Jacinta Moran, This email address is being protected from spambots. You need JavaScript enabled to view it.
--Edited by James Leech, This email address is being protected from spambots. You need JavaScript enabled to view it.