A Review of the Nigerian Energy Industry

Sudan denies South’s claim of oil ‘agreement’

Sudanese officials have described recent claims by counterparts in recently annexed South Sudan that the two have reached a new agreement on oil revenues as “groundless”.

Sudanese officials accused the government of South Sudan of hatching “an attempt to mislead public opinion” after it had claimed officials in the North had agreed to relax oil transit fees which had been described as “daylight robbery”.

Pagan Amum, secretary general of the South’s ruling Sudan People’s Liberation Movement, claimed at the weekend that the South had reached anagreement with Khartoum over the latter’s imposition of a $22.80 per-barrel charge for handling the former’s oil.

Amum claimed that Sudan would instead charge the South figures more in line with international norms for use of its downstream infrastructure.

“This discussion brought to an end the attempt to impose discriminatory surcharges by the government in Khartoum, who announced they would impose $22.80 per barrel … They have withdrawn officially this position,” Amum was quoted as saying. “We will be paying pipeline fees … and also we will be paying transit fees that are within the international practices and standards.”

However, Sudan has hit back, claiming that no such agreement has been reached. A statement on the government’s mouthpiece, the Sudanese Media Centre, said the country “negated” any such agreement had been hatched in the meeting in Ethiopia.

“Deputy governor of (the) Central Bank of Sudan, Badr Addin Abass…stated to press that (the) announcement issued by (South Sudan) on agreement between (the) two parties on oil transit and currency is groundless,” the statement read.

Sudan’s head of its economics committee, Babiker Ali Toum, “depicted Amum’s statements on government’s relinquishment as an attempt to mislead public opinion”, it continued.

Toum continued: “It is difficult to relinquish of the agreed amount since government has based its budget on it.”

South Sudan holds three quarters of the oil in what was until early July Sudan but is reliant on refinery and port infrastructure in the north for export and, thus, oil sales. Under the terms of a 2005 peace deal that ended decades of civil war with the north, South Sudan kept half the revenues from oil drilled in its territory, but this agreement lapsed with independence.

In late July Sudan took the bold step of factoring in a huge chunk of oiltransit fees it expected from the South in its revised 2011 budget.

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