South Sudan sells first oil, but still no agreement on transit fees

South Sudan's President Kiir is taking a hard line on oil revenues

South Sudan has sold its first oil as an independent country this week, despite the lack of an agreement on oil revenues with Sudan.

South Sudan, which declared independence from Khartoum on 9th July, sold 1 million barrels to Chinese buyer Chinaoil, a Petrochina subsidiary, on Monday 18th July. Reuters estimates the shipment to be worth US$110 million.

Director General for Energy in South Sudan, Arkangelo Okwang, said they would ship a further 600,000 barrels on 23rd July.

Okwang said he expected the north to bill the South for the use of its facilities, but that nothing had yet been decided.

Sudan fought a decades-long civil war, which ended with the signing of the Comprehensive Peace Agreement (CPA) in 2005. The CPA outlined a revenue-sharing agreement for oil, in which Sudan and the autonomous South Sudan each received 50 per cent.

Three-quarters of Sudan's 500,000 barrel-a-day output comes from the South, and is crucial to both countries economy. While much of the oil lies in South Sudan, the new nation lacks the infrastructure to exploit its reserves, and so the oil has to be moved to market through the north.

While South Sudan's President Salva Kiir said in June, 2010 that it would be possible for oil revenues to continue to be shared, he has taken an increasingly hard line in recent months.

On Wednesday 20th June, Kiir threatened to stop using the pipelines in Sudan if Khartoum insisted on sharing oil revenues as opposed to receiving transit fees.

“I am saying that we will rent the North's oil pipelines and we will give them money for our oil to be transported, and we will of course pay and there is no problem," Kiir said at a speech to a military base in South Sudan.

"However, this offer is unaccepted by the North. We have agreed on one thing that the oil issue should not be disrupted. They [Sudan] need oil. But we fought for 21 years without oil and we can still go for 3 years until we build our own oil infrastructure,” Kiir added.

Lead negotiator for South Sudan on oil issues, Pagan Amum, was reported in the Sudan Tribune as saying that the north had asked for “unfair and unreasonable” conditions of passage.

 

“They came with crazy ideas saying they are going to impose several transit fees – a usage fee, something called a normal transit fee, then something called a special fee – maybe $15 per barrel, even more – then maybe other charges, and they wanted revenue-sharing to continue,” Amum said.

Amum said the south was instead prepared to offer $3bn in “assistance” to the north and offered transit fees in line with international norms, citing 41 cents per barrel charged by the Chad-Cameroon pipeline, which is a similar-length.

Khartoum is keen to salvage as much from the south's oil supplies as possible, and Sudan's Finance Minister Ali Mahmood Hassanein said on 19th July that Khartoum was in the process of crafting laws which would set the fees they would expect the South to pay.

He said the fees would contain three levels based on the fact that oil passes through Sudan which requires the imposition of sovereign fees.

Khartoum has threatened to cut shipments of oil from the south along its piplines if the south refuses to pay transit fees or continuing sharing oil revenues. Likewise, Juba has said it will build its own oil infrastructure, moving the oil south, if Khartoum doesn't agree on transit fees.

A delegation from the South is expected to travel to the north to carry out talks soon.

Sources: Sudan Tribune, Reuters

For more information, please see the Menas Borders website, here.

South Sudan asks UN to send new peacekeeping force to border

Pagan Amum, Ban Ki-moon and SPLM North America representative Ezekiel Lol Gakouth 

The UN Security Council met on Monday 21st March to discuss the situation in Sudan, and Pagan Amum, secretary-general of the South's Sudan People's Liberation Movement (SPLM) said he asked the council to consider deploying a new peacekeeping force at the border.

According to AllAfrica, the meeting was an unofficial sitting of the council, held in response to a request from a people's organisation in the US on the disputed Abyei region, although this has not been confirmed.

In a statement to Sudan's SUNA newspaper, Khalid Musa, the spokesman of the Ministry of Foreign Affairs, said the request for an unofficial meeting reflects an 'unjustifiable trend towards escalation' on behalf of the South, resulting from the failure of some circles in South Sudan to solve their own political issues.

Musa said the Sudan's envoy to the UN had made available all the facts for the Security Council and reiterated his government's commitment to the peaceful solution of all issues.

Speaking after the meeting, Amum said that the UN would be involved in investigating the Northern National Congress Party's aid to the renegade general, George Athor, that the SPLM/A is currently fighting. The south has in recent weeks accused the north of working to destabilise the South, and has recently withdrawn from talks.

The two sides have also bickered over UN Mission in Sudan head Haile Menkerios's flying to Abyei on a UN helicopter with Ahmed Haroun, an NCP member who is wanted by the International Criminal Court for war crimes in Darfur.

Amum said that Menkerios was wrong for flying with Haroun, but according to Inner City Press, UN Peacekeeping Assistant Secretary-General Atul Khare criticised the SPLM for not granting it access.

South Sudan is preparing to declare its independence from Sudan in July, following an independence referendum in January, but the transition preparations have been overshadowed by violence in recent weeks. There has been considerable violence in the disputed border area of Abyei, as well as within South Sudan between supporters of rebel general Athor and the SPLA.

Amum said he asked the council to think about deploying a new peacekeeping force to the border, but it is not yet clear how that request was received.

Sources: Canadian Press, Inner City Press, AllAfrica

For more information, please see the Menas Borders website, here.

South Sudan pulls out of talks with North

Thabo Mbeki with South Sudan President Salva Kiir (R)

South Sudan's governing Sudan People's Liberation Movement (SPLM) announced on Saturday 12th March that it was suspending all talks with the north's National Congress Party (NCP). Pagan Amum, secretary general of the SPLM made the announcement at a press conference, and accused the north of working to destabilise the emerging independent state of South Sudan.

"The SPLM has decided to suspend the dialogue with the NCP because of its policies and its support of the armed militia in south Sudan," Amum said.

Amum said his government had detailed information of a plan by the NCP to topple to the South Sudan government before it declares independence on 9th July, 2011. He also said there was evidence that the NCP has been supporting various militia groups in the south with the intention of carrying out a genocide in the region.

He added that the NCP was trying to push the Arab Misseriya tribes into confrontation with the South Sudan government and to cripple the Abyei protocol.

Dozens of people have been killed in recent clashes between the SPLA and a rebel militia in South Sudan's Upper Nile State and between the SPLA and the Misseriya in the Abyei area.

The SPLM released confidential documents detailing the NCP's alleged plot to overthrow the southern government by supporting, arming, training and financing militias opposed to the South.

The documents, dating from 2008-2010, include information involving the northern military high command, the army's logistical deparment and intelligence units, as well as the defence ministry, according to the Sudan Tribune.

The NCP has denied the SPLM's accusations, and in a statement issued on Monday 14th March, NCP political secretary Ibrahim Gandoor said that the SPLM was seeking a scapegoat for its problems now that it was being confronted by a large armed opposition.

The NCP issued a further statement on Tuesday 15th Mach denouncing what it called 'fabricated documents' aimed at igniting hatred between the two sides and provoking a return to war.

The international community has responded quickly, appealing to the leaders of South Sudan to resume negotiations on post-referendum arrangements. Thabo Mbeki, the former South African president and chairman of the African Union (AU) High-Level Panel on Sudan told reporters at a press conference in Juba, South Sudan's capital, that he remains optimistic that the two parties will get back to the negotiating table.

Mbeki met with South Sudan's Vice President Riek Machar on Tuesday in Juba to stress the importance of resuming negotiations to prevent any deterioration of the situation.

The Sudan Troika – the US, UK and Norway – issued a joint statemnet on Tuesday, expressing 'serious concern' over the south's decision to freeze talks with the north. The Troika, which played a major role in establishing the Comprehensive Peace Agreement (CPA) in 2005, which brought the civil war to an end, said it was 'critical' that talks resumed.

The Troika's statement, posted on the UK's Foreign and Commonwealth Office (FCO) website, said “we urge President Bashir and President Kiir to take steps against alleged actions that destabilize each other's governments and territories, and to lay the ground for mutual cooperation with the goal of the creation of two viable states in July.”

The statement also reminded both parties of their obligation to permit the UN Mission in Sudan (UNMIS) full access to the Abyei area. The UN Secretary-General's office released a statement on Monday complaining that the mission had been refused access to areas of conflict in Abyei and restricted in its movement.

South Sudan voted in a January referendum to seceded from the North and form a new country. A number of issues remain unresolved between the two countries, including oil revenues, border demarcation and the ownership of the border-straddling Abyei region.

Violence has plagued the border region and the south since the referendum. Renegade Southern army general Gorge Athor's forces attacked Malakal town in the Upper Nile State on Saturday, the latest in a series of bloody clashes. The SPLM accuses the north of funding Athor's militia.

Sources: Sudan Tribune, FCO, Eastday

For more information on Sudan, see the Menas Borders website, here.

North and South Sudan agree to cooperate on debt relief and border issues

SPLM Secretary General Pagan Amum

South Sudan will help the north get relief on its $38 billion in debt, as long as the north 'cooperates' on border and other issues in the countdown to the south's independence in July, a southern official said.

At the end of a week-long meeting with northern leaders, SPLM Secretary General Pagan Amum, said "We are ready to join the north in joint efforts for debt relief,” according to Reuters.

"But our participation is conditional to the cooperation of the north in all the other areas including Abyei, as well as also assuming the redemption of the Sudanese currency as we change the currency."

Representatives from both sides met in the Ethiopian resort town of Debre Zeit, for meetings mediated by the African Union High-Level Implementation Panel on Sudan (AUHIP), led by former South African president Thabo Mbeki.

While little concrete was accomplished, both sides agreed to send a joint team to the spring meetings of the World Bank and the International Monetary Fund (IMF) to campaign for debt relief.

The question of what will happen to Sudan's debt when it becomes two countries has been one of the most pressing issues in the run-up to the south's independence. The SPLM has said previously that they will not share the country's foreign debt, saying that it was money borrowed to finance the northern army's fight against the south in the civil war.

Reuters reports that a note by the IMF said much of Sudan's debt dates back to the 1960s, when it borrowed on poor terms to finance large industrial projects. Nearly 90 per cent of Sudan's debt is owed to bilateral and commercial creditors, with their own requirements, and would take at least three years to clear, according to a paper by the Center for Global Development.

At the week-long meetings, the two sides also discussed the future of the oil sector and the two state-owned oil companies, Sudapet and Nilepet. Under the Comprehensive Peace Agreement (CPA), which brought the two-decade long civil war to an end, the north and the south share the revenues from southern oil 50-50.

Most of Sudan's oil reserves are in the South, but the pipelines and refineries are in the north. Regardless of what new deal is negotiated, the north is almost certain to get fewer revenues from the south after its independence.

The two sides discussed a range of other issues, including border demarcation, ownership over the border region of Abyei, currency issues, and Nile water ownership.

Talks will resume in Sudan before the two sides return to Ethiopia on 5th April, for another round of negotiations, according to the AUHIP.

Meanwhile, violence has continued to take place in Abyei, according to the Satellite Sentinel Project, a group backed by George Clooney and Google. The group uses satellite images to track violence along the border area in the wake of January's independence referendum. New images show that some 300 buildings were burned in a village near Abyei on Saturday 5th March.

Abyei has seen a wave of attacks in recent days that have killed more than 100 people and displaces tens of thousands.

"Village burning has caused tens of thousands to be displaced, unknown numbers of civilian casualties, and the deliberate destruction of at least three communities," said Clooney.

The latest images show an attack on Saturday, 5th March, on the village of Tajalei. Charles Abyei, speaker of the parliament in the Abyei area said that it was the third village attacked. After the first two villages were attacked, rumours spread that Tajalei would be next, so civilians fled.

"The place was empty and these elements of the Popular Defence Forces came and found nobody except one man who was mentally sick," said Abyei. "They killed him and they burned down the whole village."

The Popular Defence Forces that Abyei blames are a milita that was used as a proxy force by the northern Sudanese military throughout the civil war.

A round of talks over Abyei is due to begin on Monday 7th March, but officials from Abyei are not optimistic. "We are not expecting anything to come out of the talks," the Canadian Press quoted Charles Abyei as saying.

"If Khartoum was serious they would not have supplied the whole areas of northern Abyei with arms. They have the intention of occupying the whole area of Abyei to try to control it."

Sources: Sudan Tribune, The Canadian Press, Reuters Africa, Satellite Sentinel Project

For more information, see the Menas Borders website, here.

South Sudan decides on its name

South Sudan has been chosen as the name of what will be the world's newest country when it comes into existence on 9th July, ending months of speculation.

Other suggested names had included Nile Republic and Cush, a reference to a Biblical-era kingdom in the area.

Some 99 per cent of southern Sudanese voted for independence from the north of Sudan in a referendum held in January.

The name decision was announced after a meeting of the top committee of the south's ruling SPLM party.

The SPLM's Secretary General Pagan Amum said the decision, made by the party's politburo, will require approval by parliament.

But that is a formality as the SPLM holds the vast majority of seats in the assembly.

Mr Amum said negotiations were under way with the north about how to go forward with the partition and he warned of the challenges ahead.

"We are a baby nation that has just been born - and like a human baby, we are fragile but have the potential to become great," AFP news agency quotes him as saying.

He said the current pound currency would be replaced by a new currency, also to be called the pound.

The referendum on independence for the oil-rich south was part of a deal to end decades of north-south conflict.

The week-long vote itself passed off peacefully, but tension remains high in parts of the oil-rich area which straddles the north and south.

Many issues remain to be resolved before the new country is formed, including how to deal with oil revenue. The south of Sudan contains most of the oil fields, but they have to be transported through the north.

Under the Comprehensive Peace Agreement (CPA), which brought the civil war to an end in 2005, the two sides split oil revenues evenly, but Amum announced on Tuesday 15th February that would not be the case any longer.

"The notion of sharing wealth will not be there. There is no continuation, whether 50 percent or anything," Amum said according to Reuters.

He said they will only pay a fee for using the pipelines that transport the oil to Port Sudan.

The fate of the oil-rich Abyei region is yet to be determined, although Amum said the SPLM will hold talks with the north's ruling National Congress Party (NCP) on Friday 18th February to discuss the region.

The Abyei region was supposed to have its own referendum on which State to join in January, but it was postponed when the two sides could not agree on voter eligibility.

Last week, some 200 people were killed in south Sudan's Jonglei state in fighting involving those loyal to rebel leader George Athor. Most of those killed were civilians. The SPLM has accused the north of backing Athor, while Athor blames the clashes on the southern army.

Sources: BBC News, Sudan Tribune

For more information on Sudan, see the Menas Borders website, here.