South Sudan may regain stolen oil as Sudan fails to sell
South Sudan said it may regain the 2.6 million barrels of “stolen” oil because Sudan is unable to sell the crude after ordering companies to load the cargoes onto
four tankers last month.
South Sudan warned anyone involved in trading the crude that they face legal action, said Pagan Amum, the country’s chief negotiator with Sudan. Yahia Hussein, minister of state at
the Ministry of International Cooperation of Sudan said today he has no knowledge about the shipments and denied that his nation stole the oil from its southern neighbour.
“The government of Sudan is not able to sell much of this oil,” Amum told reporters yesterday evening in Juba, South Sudan’s capital. “They may surrender it back.”
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 over borders and how much the south should pay for the use of Sudan’s export pipeline have failed. The latest round of talks is scheduled for Feb. 23 in Addis Ababa, the Ethiopian capital. The disputed oil is worth about $280 million based on
prevailing spot prices.
Sudan 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,
according to letters from oil companies that were provided by Amum. Sudan also loaded 600,000 barrels of Nile Blend on to the Ratna Sharada, the documents showed.
‘Difficult to Sell’
“Khartoum will find it very difficult to sell the oil” on the global market, Marc Mercer, African associate with Eurasia Group in London, said by phone today. “The south has definitely
threatened legal action. The extent to which the south is able to follow through on that threat is questionable.”
The oil will probably continue to stay on the tankers, or Sudan will find companies to sell the cargoes, Mercer said. “The only way the south is likely to get it back is if the two sides reach an agreement.”
The Ratna Sharada is now near Japan, still fully laden with its cargo, according to ship-tracking data from AISLive Ltd. compiled by Bloomberg. Data show that the vessel loaded crude from Bashayer, Sudan, on Jan. 18 to Jan. 20 and arrived in Singapore last week.
Amum said the ship rerouted from Singapore, possibly seeking a buyer in a location where his government’s lawyers would have more difficulty pursuing legal action.
The Sea Sky and Al Nouf remain in the Fujairah area, on the coast of Sudan, according to AISLive data. The location of the ETC Isis remains unknown.
South Sudan started shutting oil production on Jan. 23 amid the deepening dispute. 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 south will continue to press for repayment of the “stolen” oil, as well as an agreement on other outstanding issues including the status of the region of Abyei and disputed sections of the border, Amum said. Without a comprehensive deal, South Sudan will not begin production, he said.
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