News / Africa

South Sudan Gambles Big With Oil Shutdown

South Sudanese express their support as President Salva Kiir declared a halt on all oil operations in South Sudan, in Juba, January 23, 2012.
South Sudanese express their support as President Salva Kiir declared a halt on all oil operations in South Sudan, in Juba, January 23, 2012.
Gabe Joselow

South Sudan is shutting down its oil production to protest against high fees Sudan charges to transport the commodity through northern pipelines. The move threatens both countries' economies and is heightening tensions that have festered since the south declared independence in July.

The government of South Sudan says it already has cut oil output in the country by more than half and plans to continue reducing outflows unless Sudan meets its demands.

South Sudan had shut down most of its wells by the end of the day Tuesday in the north central parts of the country. The process is continuing in Upper Nile state in the east, home to the bulk of the country's oil fields.

Continuing conflict

The shutoff is the latest development of an ongoing dispute between the two Sudans on how to share oil revenues following their split last year.

South Sudan claims the north has confiscated $815 million in oil from the south. Khartoum says it took the oil to compensate for lost revenues.

Sudan also is charging the south transit fees as high as $36 per barrel - far above the industry standard - which is closer to $1 per barrel.

South Sudan's Petroleum and Mining Minister Stephen Dhieu Dau says that Khartoum's terms are unacceptable.

“We also have been paying the operation costs for the pipeline and marine terminal and covering all these facilities. But Khartoum, unfortunately, is imposing punitive fees, discriminatory fees, against South Sudan as a penalty for the secession,” said Dau.

Heavy reliance on oil money


More than 90 percent of South Sudan's revenues are derived from oil exports. The country, at its creation, inherited three-quarters of the known oil reserves in the former united Sudan. The separation is said to have cost Khartoum more than $7 billion in lost revenue.

While South Sudan produces the bulk of the crude oil, though, it has no refining capacity, and relies on northern pipelines to export.

The move to shutdown the pipelines will cost both countries economically, but Dau said the south has considered the alternatives.

“You will come to one answer. Either you produce, you get zero - or you shut down, you get zero and Khartoum gets zero,” said Dau.

AU summit negotiations

The leaders of the two Sudans are expected to meet on the sidelines of the African Union summit in the Ethiopian capital Addis Ababa. An AU panel that has been mediating the negotiations submitted a new draft proposal this week to resolve the dispute.

Dana Wilkins, a campaigner at Global Witness, a natural resources monitoring group, said the south has a lot to lose if its gambit does not work.

“South Sudan in particular is going to feel the hit on revenues pretty quickly. It's not clear just how much they have in savings, but what is clear is that they're going to have to rely heavily on the international community for financial support over the coming year if this shutdown happens in full and the negotiations don't come to at least an interim arrangement,” said Wilkins.

South Sudan is exploring alternative transit routes for its oil. The government announced this week it has struck a deal with Kenya for a new pipeline stretching to the town of Lamu on the Indian Ocean. But it was not clear when the pipeline may be started or finished.

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants 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.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs