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

Photogallery Americans Celebrate Thanksgiving With Feasts, Festivities

Holiday traditions include turkey dinners, 'turkey trots,' American-style football and New York parade with giant balloons More

Video For Obama, Ferguson Violence is a Personal Issue

With two years left in term, analysts say, president has less to lose by taking conversation on race further More

Video Italian Espresso Expands Into Space

When Italian astronaut Samantha Cristoforetti headed for the ISS, her countrymen worried how she would survive six months drinking only instant coffee 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.
South Africa Sees Male Circumcision as Way to Reduce HIV Infectionsi
X
November 28, 2014 3:31 PM
South Africa remains plagued by AIDS despite massive government and NGO efforts on prevention and life-sustaining Anti-Retro-Viral programs. But the country has opened up another front to reduce new HIV infections: promoting circumcision. Emilie Iob reports for VOA News from a pioneering circumcision center in Orange Farm, Johannesburg.
Video

Video South Africa Sees Male Circumcision as Way to Reduce HIV Infections

South Africa remains plagued by AIDS despite massive government and NGO efforts on prevention and life-sustaining Anti-Retro-Viral programs. But the country has opened up another front to reduce new HIV infections: promoting circumcision. Emilie Iob reports for VOA News from a pioneering circumcision center in Orange Farm, Johannesburg.
Video

Video To Make A Living, Nairobi Street Vendors Face Legal Hurdles, Physical Violence

The Nairobi City Council has been accused of brutality in dealing with hawkers in the Central Business District - in order to stop them from illegally selling their wares on the streets. Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video For Obama, Ferguson Violence is a Personal Issue

Throughout the crisis in Ferguson, Missouri, President Barack Obama has urged calm, restraint and respect for the rule of law. But the events in Ferguson have prompted him to call — more openly than he has before — for profound changes to end the racism and distrust that he believes still exists between whites and blacks in the United States. VOA White House correspondent Luis Ramirez reports.
Video

Video Online Magazine Gets Kids Discussing Big Questions

Teen culture in America is often criticized for being superficial. But an online magazine has been encouraging some teenagers to explore deeper issues, and rewarding their efforts. VOA religion reporter Jerome Socolovsky went to this year’s Kidspirit awards ceremony in New York.
Video

Video US Community Kicks Off Thanksgiving With Parade

Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.

All About America

AppleAndroid