South Sudan begins oil production shutdown

24 January 2012, Sweetcrude, KHARTOUM – South Sudan says it has begun the shut down of its oil production, Monday, over rising faceoff with its northern neighbour, Sudan, over oil transportation fees.
Bloomberg qoutes Barnaba Marial Benjamin, South Sudan government spokesman, as saying it began the shutdown at the Thar Jath field in Unity state, reporting that the shutdown will take two weeks to complete.
The Jath field is run by the White Nile Petroleum Operating Company, whose partners include Malaysia’s Petronas and India’s Oil and Natural Gas Corporation, according to the company website.
South Sudan says Sudan is seizing exports that pass through its territory to an export terminal on the Red Sea and is demanding $32 a barrel in transportation fees.
Sudan says it is diverting the crude to cover unpaid bills.
South Sudanese President Salva Kiir on Monday said Sudan has “looted” $815 million worth of his country’s oil.
“At this time we have no guarantee that oil flowing through the Republic of Sudan will reach its intended destination,” Kiir told parliament. “We can’t allow assets which clearly belong to the Republic of South Sudan to be subject to further diversion.”
South Sudan took control of about three-quarters of Sudan’s output of 490,000 barrels per day when it gained independence in July. The crude is pumped mainly by China National Petroleum Corporation, Petronas and ONGC.
China imported about 250,000 bpd, or more than 65% of total Sudanese exports, accounting for 5% of the nation’s imports in 2010, according to data from the US Energy Department.
Analysts say the suspension of oil production by South Sudan, which pumps crude of a similar quality to that of Libya, may bolster oil prices.
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