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Sudan blocks South Sudan oil shipment
by Staff Writers
Khartoum, Sudan (UPI) Aug 5, 2011

disclaimer: image is for illustration purposes only

South Sudan became an independent state on July 9 with agreements with Sudan over oil shipments to transit through its northern neighbor.

Less than a month later, however, the arrangements are already in dispute, as a shipment of oil produced in South Sudan was prevented from leaving Sudan's Port Sudan over a dispute regarding pipeline transit fees.

South Sudanese Oil Minister Garang Deng said a tanker containing 600,000 barrels of South Sudan crude was prevented from sailing because Port Sudan authorities refused to let it proceed to its destination unless its service fees are in advance.

"We have failed to reach solutions with the government of Sudan that would guarantee that the ship would depart at the specified time," Deng said in a report in the Sudan Tribune. "I have contacted the finance and energy ministers of the northern government but they refused to talk about it on the pretext that they have meetings."

Sudan's daily crude oil output is approximately 500,000 barrels per day. While most of that is extracted from oilfields in South Sudan, the pipelines infrastructure and refineries are in Sudan.

The dispute is the first real test of the 2005 Comprehensive Peace Agreement between Khartoum and what would become the state of South Sudan, which stated that northern and southern Sudan would equally split the revenue from oil exports.

More than 2 million people are estimated to have died during Sudan's second civil war, which began in 1983 and ended in January 2005 with the signing of the Comprehensive Peace Agreement.

A referendum on self-determination was conducted this past January with 98.83 percent of the South Sudanese voters choosing to secede from Sudan.

The CPA directed that South Sudan would pay pipeline transit fees and loading costs to transport its oil and ship it abroad from Port Sudan terminal. The recent pronouncement indicates that the ad hoc arrangement is in disarray, boding ill for the future.

South Sudanese officials have said their northern partners are charging well above market rates for transfer and shipment fees.

Sudanese Minister of Finance and National Economy Ali Mahmood Hassanein said 73 percent of the country's oil was in South Sudan, 26 percent in the newly shorn northern state of Sudan and the remainder in the Abyei region, which is currently under dispute between the two nations.

The recently split region faces massive problems besides oil revenues.

Sudan has the largest number of internally displaced persons in the world, said the Internal Displacement Monitoring Center, which estimates around 5 million Sudanese have been driven from their homes, yet another source of potential dispute between Khartoum and Juba.

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