News / Africa

Growing Sudan, South Sudan Oil Impasse Has High Stakes

Drilling tubing is piled next to the drilling site number 102 in the Unity oil field, South Sudan (2010 file photo).
Drilling tubing is piled next to the drilling site number 102 in the Unity oil field, South Sudan (2010 file photo).
Nico Colombant

African Union mediation to end an oil standoff between Sudan and South Sudan is expected to resume this week. Analysts say the stakes are high for the governments in Khartoum and Juba, both of which rely heavily on oil revenue to maintain themselves.

Jimmy Mulla, from the Washington-based Voices for Sudan advocacy group, is one of many analysts pessimistic about the current oil impasse. “I think as of now it is nearly impossible because the two parties are completely on different platforms," he said.

Disagreements on oil transfer fees and accusations by South Sudan that Sudan was stealing southern oil coming through its pipeline led to Juba’s recent decision to shut down oil production.

Mulla puts most of the blame on Sudan. “For the most part, I would still go back and say the government in Khartoum has not been forthcoming in terms of making sure this agreement goes forward. There are international standards, there are international agreements on oil revenues, whether it is a transit fee, all these things are in place, and these are references that have been tabled both by the government of South Sudan and also by the African Union mediating body, so it should have been easier to resolve but the lack of political will to address this issue has been a major problem," he said.

The exact terms of oil revenue sharing were not agreed to before South Sudan became independent last year, following decades of civil war.

A Washington-based international relations expert Walid Phares accuses Sudan of doing whatever it can to muddle the post-breakup phase. “Keep in mind that the northern regime did not really let go of South Sudan.  They want to try to control it.  They want to try to instigate trouble within the Southern Sudanese regions," he said.

Both countries accuse each other of backing cross-border rebellions, as the exact border and some regions remain in dispute. Sudan’s President Omar al-Bashir recently said his country was closer to war with South Sudan than peace.

After the breakup, Sudan started by asking $32 in transit fees for each barrel of South Sudanese oil shipped through its pipeline and then upped the request to $36. Those two figures are more than ten times standard rates.

Analysts say the government in Khartoum has been very nervous with the loss of oil revenue as it has also been struggling with a lack of foreign currency, high inflation, civil society discontent and $38 billion in external debt.

Eric Reeves, a Sudan researcher at Smith College, believes Sudan’s government also wants to use the oil impasse as leverage to ease its debt. “Now, there have been discussions in the UK, in Germany and France that suggests it might be the case that these countries anyway are contemplating debt relief. I think that is a terrible signal to be sending Khartoum.  It only encourages them to be more intransigent, more ruthless in expropriating revenues from southern oil," he said.

Other analysts interviewed for this report said Asian countries which have been the main consumers of South Sudanese oil, especially the biggest buyer China, should try harder to help find a solution.

They warn South Sudan, which depends nearly entirely on oil revenues for state income, could easily become a failed state with escalating sectarian violence and angry unpaid soldiers if the oil shutdown persists.  

South Sudanese officials have talked about building an alternative pipeline to the Kenyan port of Lamu, but most analysts say this seems unrealistic at this point, because of cost and security issues.

The only hope they say would be for a major deal which addresses other current concerns such as ending the cross-border violence and finding long-term solutions for the remaining regions in dispute.

You May Like

Mood Tense Ahead of Scotland Independence Vote

As race to persuade undecided voters continues, No voters say they believe life in Scotland will slowly improve and do not want to take a risk by endorsing independence More

South Africa’s 'Open Mosque' Admits Everyone, Including Critics

Open Mosque founder plans to welcome gay worshipers and allow women to lead prayers More

Ukrainian Activist in Despair About Future of Her Country

IrIna Dovgan, accused of being a spy and tortured by pro-Russian separatists, is appealing to UN Human Rights Council to support her country More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
A Dinosaur Fit for Land and Wateri
X
September 17, 2014 8:44 PM
Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid