“We can confirm that the English court has ordered that the delivery can be made,” Trafigura, which bought the disputed cargo, said in a statement. “The court will hold all proceeds related to the cargo until ownership is legally established.”
South Sudan declared independence in July, taking control of fields producing of about 75 percent of Sudan’s 490,000 barrels a day of crude output. The division of oil resources has become a subject of contention between the two countries as South Sudan claims the Sudanese government in Khartoum is illegally selling the crude.
The oil tanker Ratna Shradha has been sitting off the coast of southern Japan since Feb. 14 and hasn’t docked, according to AISLive data compiled by Bloomberg. The ship loaded about 600,000 barrels of Nile Blend in Sudan on Jan. 19.
The tanker’s owner asked the court to rule on the matter because ownership of the cargo is disputed, said Pagan Amum, South Sudan’s chief negotiator in talks with Sudan.
“We will leave no stone unturned to recover the value of oil stolen by the government of Sudan,” Amum said. “We are encouraged by the steps taken by owners of the ship taken in the English court.”
An employee of Chambal Fertiliser and Chemicals Ltd., the Indian company that owns the ship, who answered the phone today, said nobody was available to comment. JX Nippon Oil (5001) and Energy, scheduled to take delivery of the oil, also declined to comment.
South Sudan ordered a shutdown of crude production after accusing Sudan of diverting fuel to its refinery, forcing companies to load oil onto ships it controlled, and blockading other shipments. Sudan said it confiscated crude to cover unpaid fees it’s owed for allowing the landlocked country to transport oil via a pipeline to Port Sudan on the Red Sea.
Sudan’s foreign ministry spokesman, al-Obeid Murawih, dismissed the dispute over Trafigura’s purchase.
“Whether we sold the oil or we did not, consumed it or not, the buyers are willing to buy or rejecting -- all these don’t help solving the core problem, which is reaching an oil deal between two countries,” he said by phone yesterday from Khartoum.
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 onto the Ratna Sharada, the documents showed.
The Sea Sky and Al Nouf remain in the Fujairah area, on the coast of Sudan, according to AISLive data. The ETC Isis is located off Singapore.
The U.K. court decision for the sale to take place with the funds kept in escrow is “significant,” said Marc Mercer, an Africa associate with the Eurasia Group in London.
“The Trafigura experience makes the north’s sale of southern oil even more difficult to other such companies,” he said today in an e-mailed response to questions. “Litigation in court as well as the possibility of further proceedings should the oil be determined as stolen will be costly for all sides -- financially and reputation wise.”
Sudan and South Sudan are scheduled to meet in the coming weeks in the Ethiopian capital, Addis Ababa, for the next round of negotiations on issues outstanding since the south separated. These include determining the status of the region of Abyei and disputed sections of the border, as well as agreeing on an oil revenue sharing arrangement.
Amum told reporters Feb. 15 that South Sudan will not begin pumping oil again until a comprehensive agreement is reached, which includes Sudan paying for southern oil it has confiscated.