Sudan Oil Disputes

Written By Brianna Panzica

Posted January 30, 2012

Sudan and South Sudan are continuing a painful disagreement over the oil fields.

Since South Sudan declared its independence from Sudan in the summer of 2011, tensions have continued in regard to the oil fields, over which South Sudan gained control of nearly three quarters.

But Sudan has been less than accommodating to South Sudan in its efforts to transport the oil to the coast.  The two are still in disagreements over the price of a transit fee for the pipelines.

South Sudan has halted its oil production for the time being in an effort to pressure Sudan into an agreement.

The new nation produces about 350,000 barrels per day, of which China buys an average 260,000 barrels per day.

This shut down created a loss of about 5% of China’s oil imports.  In addition, China has imposed sanctions on Iran, losing imports from that end as well.

South Sudan’s Deputy Minister of Petroleum, Elisabeth James, explained the situation to China Daily:

“The oil issue is legal and not political.  We are looking for an agreement that tackles the difference over the fees set to transport the south’s oil through the pipelines of the north.  This agreement should comply with the international standards.”

So far, it has not.  Sudan’s capital city, Khartoum, requested $1 billion from the South, plus $36 per barrel.

That $36 per barrel is 10 times higher than the international standards James is looking to achieve.

But Sudan is saying that the South is causing the problems.  According to Awad al-Jaz, the North’s oil minister, South Sudan would not sign a union-approved agreement that could have eased tensions.

Both nations are dealing with huge financial struggles outside of their disagreements.  Settling the oil disputes is crucial to moving away from heavy debt.

That’s all for now,


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