22 August, 2011, Sweetcrude – South Sudan is to scrap plans to build a new pipeline through neighbouring countries in favour of continuing a shaky deal with Sudan over oil exports.
The decision, if true, from the South’s president, Salva Kiir Mayardit, would represent a blow to some oil companies who had their eyes on helping build a new pipeline through Kenya.
During a meeting with the Sudan People’s Liberation Movement in the South’s capital Juba, President Mayardit rejected the idea of any new pipeline, according to a report in daily newspaper Sudan Vision.
Report claimed Mayardit decided against turning his back on Sudan’s pipeline, refinery and port infrastructure due to the “impossible conditions and exaggeration” of UK, US and French oil companies who had promised to construct a pipeline to Mombasa in three years.
The report also cited South Sudan’s Minister of Energy, Garang Deng, as saying that Sudan was to stick to charging its newly annexed neighbour to the south $32 per barrel of oil transported through its network.
South Sudan gained independence from Sudan in early July. Before independence about three quarters of the oil produced in the enlarged country came from the present day South. However, Sudan has all the infrastructure and, crucially, Port Sudan on the Red Sea coast.