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South Sudan Resumes Crude Exports through Sudan

Source: The Wall Street Journal 7/1/2013, Location: Not categorized

Landlocked South Sudan has resumed crude oil shipments from Port Sudan for the first time in 18 months, as the two former civil war foes make renewed efforts to diffuse the latest spat over the use of transit oil facilities, the main obstacle for the newly independent nation's oil exports, South Sudan's information minister said.

The first consignment of crude left Port Sudan on Sunday for Asia, as the country seeks urgent revenues to heal its ailing economy that has been battered hard by a row with Sudan since mid-2011, Barnaba Benjamin told Dow Jones Newswires. The shipment left the port the same day South Sudan's vice president, Riek Machar, arrived in Sudan for talks with Sudanese officials to ease the latest tensions.

"Oil exports are important for both South Sudan and Sudan," Mr. Benjamin said. "On our part, we remain committed to the implementation of the cooperation agreements with Sudan"

According to Mr. Benjamin, South Sudan intends sell more than 7 million barrels of crude already at storage terminals at Port Sudan to the international markets in the next few weeks.

Last month, Sudan informed South Sudan that it would block crude shipments through its territory within two months unless Juba stops supporting rebels inside several Sudanese border states. South Sudan denies the accusations.

Mr. Machar, who is accompanied by five South Sudanese ministers, met President Omar Al Bashir on Sunday and they discussed a wide range of issues and "the importance of safeguarding the bilateral relations between Khartoum and Juba," a Sudanese government spokesman said Monday. Mr. Machar's visit is the first by a South Sudanese government official since Sudan announced plans to block oil exports.

South Sudan has an export deal with Switzerland-based trader Trafigura Group. It has been pumping an average of 200,000 barrels a day since May after an agreement with Sudan to restart exports. South Sudan hoped to restore oil output to the pre-closure capacity of around 350,000 barrels a day by around August, but the latest spat threatens to hurt production, industry officials say.

Deep-rooted mistrust continues to hinder the peaceful resolution of a litany of disputes, ranging from disputed territories along the border to the backing of proxy rebels between the two nations.

Last month, U.S.-based group Enough project accused both countries of maintaining troops in at least 14 locations within their contested border areas, in violation of the September 2012 agreements to demilitarize the oil-rich common border region.

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