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A red-and-black-hulled oil tanker holding South Sudanese crude worth almost $60 million has been stranded since February more than 15 miles off the coast of Singapore. South Sudan says its northern neighbor, Sudan, stole the oil on the ETC Isis and almost 2 million barrels more. Sudan says it confiscated the crude from South Sudan to make up for unpaid fees for use of a pipeline and a port on the Red Sea that the South needs to export its petroleum. “You have this dispute between two parties over the oil, and the tanker is now stuck in no-man’s land,” says Mark Tan, the partner in charge of shipping litigation at law firm Watson, Farley & Williams in Singapore.
Last year, after 22 years of civil war in Sudan, the East African nation split in two, with the South taking 75 percent of the country’s 470,000 barrels a day of crude output and the North controlling the pipelines and facilities needed to send it abroad. The two sides have since been fighting over how much the South should pay to use that infrastructure, and South Sudan has shut off its oil production, costing the government 98 percent of its total revenue.
The tanker drama began when Sudan Petroleum, the northern country’s state-run oil company, ordered about 600,000 barrels of crude loaded onto the ETC Isis on Jan. 30, according to documents provided by Pagan Amum, the South’s chief negotiator with Sudan. Petrodar Operating, one of two pipeline companies in Sudan, initially refused to load the tanker. “This action is certainly not acceptable as the crude belongs to Republic of South Sudan government and prior approval from RSS is therefore needed,” Liu Yingcai, then-president of Petrodar, said in a Jan. 30 letter to oil ministry officials in both countries. The crude still made it onto the tanker, Barnaba Marial Benjamin, a spokesman for the South Sudanese government, said in a March 27 interview in Juba, the capital. Petrodar didn’t respond to requests for comment. “There is a dispute over the cargo, and until this dispute is sorted out, the ship will remain there in Singapore,” Osama Sefary, the general manager of Egyptian Tanker Co., which owns the ETC Isis, said in April.
The oil on the ETC Isis is one of four shiploads the South claims have been stolen. Two ships carrying disputed oil were anchored off the Sudanese city of Port Sudan on the Red Sea. A fourth contested shipment of oil was delivered, and is now the subject of a lawsuit filed at the London High Court of Justice. So far no legal claims regarding the ETC Isis have been filed in London or Singapore.
Sudan and South Sudan have been holding a series of talks on border security and oil payments, with no resolution. So for now, the ETC Isis remains in limbo. As it waits to dock, it may be racking up tens of thousands of dollars a day in leasing fees and fuel expenses. The amount can be estimated from the daily rate for renting a similar-size ship, plus the cost of about five tons of fuel per day needed to keep it running, says Dag Rømmen, a master mariner and former ship manager who is now director of consulting firm Rommen in Singapore. For the ETC Isis, that’s about $1.8 million to go nowhere for almost half a year.
The bottom line: The ETC Isis, with almost $60 million of crude on board, is stranded off Singapore as Sudan and South Sudan argue over oil payments.