Bloomberg News

Sudan to Shut Oil Pipelines Without South’s Fees, Bashir Says

June 21, 2011

June 21 (Bloomberg) -- Sudan will shut export pipelines for oil pumped in Southern Sudan if the landlocked south doesn’t pay usage fees or share proceeds following its independence from the north next month, President Umar al-Bashir said.

Southern Sudan will assume control of about 75 percent of Sudan’s current oil production of 490,000 barrels a day when it is declared independent on July 9. Under the 2005 peace agreement, which ended the two-decade civil war between the north and the south, the two sides share proceeds from oil pumped in the south on a 50-50 basis.

“Either we continue the split, or we take our right from any oil that passes through our land here,” al-Bashir said in a speech given in the northeastern Red Sea state and broadcast live on state-owned Sudan TV. “If you don’t want either of the two options, we will shut the pipeline.”

Delegations from the two sides agreed last month that the south will pay the north fees for the use of pipelines and facilities at Port Sudan on the Red Sea to export the crude, Lual Deng, a member of the south’s ruling Sudan People’s Liberation Movement and the oil minister in Sudan’s national unity government, said on June 16.

The two sides are discussing the cost of the fees, which must be “reasonable” or the south would look for other ways to export its oil, Deng said.

Sudan’s crude is pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd and India’s Oil & Natural Gas Corp.

--Editors: Emily Bowers, Antony Sguazzin.

To contact the reporter on this story: Maram Mazen in Khartoum at mmazen@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


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