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Sudan loads South Sudan crude oil for export documents show

Sudan ordered oil companies to load
2.6 million barrels of South Sudanese crude for export last
month without its neighbor’s authority, according to documents
obtained by Bloomberg News.
 
The African nation put 1.9 million barrels of Dar Blend
onto three tankers, comprised of 650,000 barrels on the Sea Sky,
750,000 barrels on the Al Nouf and 600,000 barrels on the ETC
Isis, letters provided by the office of Pagan Amum, the southern
government’s chief negotiator with Sudan, showed. Sudan also
loaded 600,000 barrels of Nile Blend on to the Ratna Sharada,
the documents showed.
 
South Sudan gained independence from its northern neighbor
on July 9, gaining control of about 75 percent of the formerly
united country’s 490,000 barrels-a-day of output. Negotiations
since then have failed to yield an agreement on how much the
south should pay for the use of Sudan’s export pipeline. The
latest round of talks began today in Addis Ababa, the Ethiopian
capital. The disputed crude is worth about $280 million.
 
Greater Nile Petroleum Operating Co. loaded the Ratna
Sharada, while Petrodar Operating Co., an oil-pipeline operator
in Sudan, was instructed to fill the other three tankers,
according to the documents. Al-Obeid Murawih, a spokesman for
the Sudanese Foreign Ministry in Khartoum, didn’t answer a phone
call by Bloomberg seeking comment.
 
“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, president of
Petrodar, said in an letter to officials of oil ministries in
both countries on Jan. 30, referring to the loading of a Dar
Blend cargo on the ETC Isis.
 
‘Physically Removed’
 
The shipment of Dar Blend onto the Sea Sky was enforced by
the government of Sudan’s security forces and was completed Jan.
14, Liu said in a separate letter.
 
“Our PDOC staff in Marine Terminal had been threatened to
be physically removed if they do not comply with the loading
activities,” he said.
 
South Sudan produced about 260,000 barrels a day in
December, while Sudan pumped 110,000 barrels, according to the
International Energy Agency. China imported about 260,000
barrels from the two countries last year and will probably be
most affected by the disruption, the IEA said today in its
monthly oil market report.
 
An official at Petrodar, who declined to be identified
citing company policy, declined to comment on the matter. A call
to Greater Nile’s office in Khartoum wasn’t answered.
The Ratna Sharada loaded crude from Bashayer, Sudan, on
Jan. 18 to Jan. 20 and arrived in Singapore this week, according
to ship-tracking data from AISLive Ltd. compiled by Bloomberg.
 
Shutting Production
 
South Sudan started shutting oil production on Jan. 23 amid
a deepening dispute with its northern neighbor over
transportation fees for its crude exports. Before the halt,
South Sudan’s oil was pumped mainly by China National Petroleum
Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil and
National Gas Co.
 
The current negotiations will cover all issues outstanding
since separation, including the status of the disputed territory
of Abyei and undemarcated sections of the border, Barnaba Marial
Benjamin, a South Sudanese government spokesman, said by phone
yesterday from Juba, the country’s capital. The talks will
include a “forum” involving both governments, as well as CNPC
and ONGC, he said.
 
“In the absence of a foreseeable resolution, we have also
reduced production estimates by around 200,000 barrels a day in
the first quarter of 2012 and by 100,000 barrels a day for 2012,
reflecting landlocked South Sudan’s export conundrum,” the
Paris-based IEA said in the report.
 

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