US$ 236m in Oil Export Fees earned from South Sudan

Sudan earned more than US$ 230m in fees for the export of South Sudanese oil this year, official media reported yesterday, days before a Khartoum deadline to shut the pipelines. “The government of South Sudan sent the fees for oil transportation to the Sudan Central Bank,” the official Suna news agency quoted the bank’s assistant governor, Azhari al-Tayeb al-Faki, as saying. The documented amount is US$ 236m, Suna said. That figure covers fees for transporting South Sudanese oil to the Port Sudan export terminal, as well as a package to compensate Khartoum for the loss of oil when South Sudan separated, Suna said.

The South became independent two years ago. It split with about 75% of united Sudan’s oil production, leaving the country without its major source of export earnings. Inflation soared and the Sudanese pound plummeted in value on the black market. Oil refineries and export pipelines stayed under Sudan’s jurisdiction but the two sides could not agree on how much the South should pay for using that infrastructure. South Sudan’s government in Juba halted oil production early last year, accusing Khartoum of theft, but pumping resumed in April after relations between the two sides appeared to be improving. In June, Sudan accused the South of backing rebels on Sudanese soil and abruptly told oil companies they had 60 days to stop transporting the crude.

The deadline has been extended twice and is now set for September 6 while oil continues moving through the pipelines for export. The extensions came in response to an appeal from the African Union which asked for more time to investigate allegations – by both Sudan and South Sudan – that they are supporting rebels operating in each other’s territory. Regional nations also began to address another point of contention between Sudan and South Sudan, determining the centreline of a demilitarised buffer zone along the disputed border. On Friday, the United Nations Security Council urged Khartoum to suspend any actions to halt the oil flow and said the two countries should “maintain dialogue” to ensure the oil keeps moving. The fees due to Khartoum, and the export revenues for the South, are potentially worth billions of dollars to both impoverished economies.

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