JUBA: South Sudan will slash its oil output to 100,000 barrels a day over the weekend as it moves toward a full shutdown, its foreign ministry said, after Sudan decided to block its exports in a row over rebels operating across their shared border.
Sudan, the sole conduit for South Sudan’s oil exports, said a month ago it would close two cross-border oil pipelines within two months and insisted oil production be shut by August 7 unless South Sudan gave up support for the rebels. South Sudan’s government in Juba denies providing such support.
Oil and foreign grants are the main source for South Sudan’s budget. Diplomats worry that turning off oil wells will undermine stability in the African country, which seceded from Sudan in 2011. They point to recent looting of aid agencies by soldiers as a sign that Juba is struggling to pay salaries.
The shutdown is also grave news for Sudan, which has been struggling with turmoil since losing most oil reserves with South Sudan’s secession. Oil fees from Juba are essential to bring down soaring inflation, which stokes dissent.
The dispute threatens to disrupt oil sales of China National Petroleum Corp, Malaysia’s Petronas and Indian firm ONGC Videsh which operate the fields in the South.
Landlocked South Sudan, which depends on a Sudanese Red Sea port to export its crude, said on Thursday that it had started shutting output to 160,000 b/d, down from 200,000 b/d. “It should go down to 100,000 b/d over the weekend, and then next week it will continue to go down from there,” Mawien Makol Arik, a foreign ministry spokesman in Juba, said yesterday.
Sudan has not commented on Juba’s decision to reduce its oil flows. South Sudan had only resumed oil production in April, after turning off wells pumping around 300,000 b/d in January 2012 when both sides failed to agree on pipeline fees. Sudan has allowed the sale of oil that had already reached its territory before notifying Juba of the pipeline closure.
Sudan and South Sudan had agreed several times since last year to resume oil flows and put an end to hostilities plaguing them since their messy divorce. But mutual mistrust runs deep.
Khartoum accuses Juba of supporting the “Sudanese Revolutionary Front” (SRF), a rebel alliance, which complains of neglect at the hands of the wealthy Khartoum elites. The SRF in April staged an attack on central Sudan, embarrassing the army on whose support President Omar Hassan al-Bashir depends.
South Sudan in turn accuses Sudan of backing rebels in its eastern Jonglei state, where fighting is making it impossible to realise government plans to search for oil with the help of France’s Total and US ExxonMobil.
Reuters
