Sudan rejects South Sudanese oil offer
A recent proposal by South Sudan designed to solve the dispute over oil fees has met with rejection by Sudanese diplomats, making the likelihood of a lasting agreement between the two countries rather low.
The proposal stated that South Sudan would be willing to pay US$ 9.10 per bbl of oil transported through Greater Nile Petroleum Operating Company pipelines and US$ 7.26 per bbl transported through PetroDar pipelines. This would involve something of a compromise for both countries; South Sudan had initially advocated a fee of US$ 1 per bbl whilst Khartoum had insisted upon US$ 36 per bbl.
In addition to transit fees, South Sudan offered to pay a compensation package of US$ 3.2 billion over three and a half years as compensation for Sudan’s economic losses as a result of Juba’s independence. Juba also stated that it would forego its demands for US$ 4.9 billion in compensation for unpaid oil payments (from production prior to its independence) and confiscated oil, which was the spark behind the current dispute and led to a shutdown of South Sudan’s entire oil production in January.
The South’s proposal, however, was rejected and referred to by one member of the Sudanese delegation as “nothing new.” A spokesman for the Sudanese government said that the South’s offer was “useless” as it did not cover topics such as the settlement of the ongoing border dispute between the two countries: “Now isn’t the time to discuss oil, even if they offered US$40 a barrel in transit fees.”
The offer’s rejection has not gone down well with South Sudan; one official at the Information Ministry referred to the rejection as being in “bad faith” - “The hard-liners in Khartoum don’t want peace, they are trying to squeeze us economically.”
Both countries have been ordered by the UN to find a solution to the ongoing dispute by the 2nd of August. After this point, the UN has said sanctions could be imposed upon both countries.
Edited from various sources by David Bizley
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/25072012/sudan_rejects_south_sudanese_oil_offer/
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