Download now: Oil Price Outlook 2024

Violence Jeopardizes Sudanese Oil Talks

Brian Hicks

Written By Brian Hicks

Posted March 7, 2012

A tenuous truce between Sudan and South Sudan has been jeopardized after South Sudan officials blamed northern Sudan for the bombing of an oil pipeline that took place February 29, in the South Sudan city of El Nar.

Oil has remained a contentious issue between the two countries since an armistice was reached in June, ending a 5-year-long civil war.

South Sudan, which gained control of 75 percent of the former united Sudan’s oil reserves, capable of producing about 350,000 barrels a day, has been locked in a heated debate with Sudan over how much it should pay to transport oil through Sudanese pipelines.

Sudan’s economy is heavily dependent on revenues collected from pumping southern Sudanese oil through its pipeline, and will not tolerate Southern Sudan’s intention of building an alternate pipeline route through Kenya, Ethiopia and Djibouti.

Samson Wassara, a political science professor at Juba University, said the bombing was scent as a warning to the south; Sudan was making it clear any attempt to divert oil will be met with heavy resistance.

At the latest round of talks the South was offering $1 per barrel but Sudan would settle for nothing less than $6 a barrel plus a renegotiation of pipeline and processing fees making the total cost $36 per barrel.

Intransigence on both sides has made the meetings largely unproductive and heated rhetoric has some officials worried if an agreement is not reached soon the problem could escalate into another full-scale war.

South Sudan’s chief negotiator Pagan Amum announced after a failed round of negotiations he was deeply troubled by the threat the Sudanese government represents.

Responding to a question concerning a series of attacks popping up along the disputed border between the two countries Amum said, “We are concerned the government of Sudan is beating the drums of war against South Sudan.”

South Sudan’s government plans on filing a complaint to the United Nations Security Council implicating Sudanese warplanes as the ones responsible for dropping three bombs on the El Nar field.

Diplomats from both countries are scheduled to meet in the Ethiopian captial of Addis Abba on March 16 to resume talks, but it is unlikely any headway will be made on the oil situation.

Until next time,

Nate

Angel Pub Investor Club Discord - Chat Now

Brian Hicks Premium

Introductory

Hydrogen Fuel Cells: The Downfall of Tesla?

Lithium has been the front-runner in the battery technology market for years, but that is all coming to an end. Elon Musk is against them, but Jeff Bezos is investing heavily in them. Hydrogen Fuel Cells will turn the battery market upside down and we've discovered a tiny company that is going to make it happen...

Sign up to receive your free report. After signing up, you'll begin receiving the Energy and Capital e-letter daily.