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Sudan to slap fees on oil flows from South Sudan

North Sudan hardens its position on the flow of southern oil through its pipelines and Red Sea port saying that South Sudan government is not serious about reaching a permanent transport fees agreement

Reuters, Thursday 5 Jan 2012
South Sudan oil exports have to go through its northern neighbour (Photo: Reuters)

Sudan will impose monthly fees on crude oil flowing from the newly-independent south until the two nations reach an agreement on transport payments, Sudan's President Omar al-Bashir said on Wednesday, in a hardening of Sudan's position.

Bashir, addressing a delegation from the Sudanese parliament, said landlocked South Sudan was benefiting for now from an absence of mandatory transport fees but that its stance in talks showed it was not serious about reaching an agreement.

"Because of this we had taken a unilateral decision to impose passage fees on the crude oil every month, and this is our right," Bashir said.

South Sudan will have to pay Khartoum to use its oil pipeline and Red Sea port to ship the oil, but the two sides have been unable to hammer out details at talks in Ethiopia. The negotiations are due to resume in mid-January.

The independence of South Sudan in July last year under a 2005 peace deal with Khartoum removed two-thirds of Sudan's 500,000 barrels per day of oil production. Oil is the main source of revenue for both governments.

South Sudan has accused Khartoum of temporarily blocking loading of crude. Sudan denies the charges.

At stake are oil sales, worth around $3 billion, that South Sudan has contracted since its independence. The companies operating in both countries are mainly Asian, such as China's state firm CNPC.

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