New oil deal leaves South Sudan begging for international help
South Sudan has called on the international community to assist the one-year old nation fill a huge financial gap created by the recent agreement with Khartoum as details on oil deal emerge.
African Union chief mediator, Thabo Mbeki, on 3 August announced a break-though deal on oil transportation fees. In line with this agreement Juba will pay $11 for the oil produced unity state and $9.10 for the oil of Upper Nile. The South Sudan will also pay $3.028 billion as transitional financial assistance. The deal will last three and a half years.
South Sudan’s vice president, Riek Machar, on Tuesday said the deal which was reached due to the pressure exerted by the international community has unfortunately left a huge gap of oil revenues lost to Khartoum.
In a meeting on Tuesday with the Ambassador of Netherlands, Kees Van Baar, the Vice President told the European diplomat that the new nation will lose a total of $12 billion dollars to Khartoum per the deal.
He said South Sudan will continue to lose 17% of its total oil revenues every year for the next three and a half years.
In detailing the figures of the deal he said the average commercial agreement reached with Khartoum is $3.5 billion for the next three and a half years, which is inclusive of all types of fees.
The arrears of commercial deal owed to Khartoum which dated back between 9th July 2011, when South Sudan became independent to January 2012, when the oil production was shut down, will also amount to another half a billion dollars, he said.
South Sudan, he added, will also lose $4.97 billion of debt relief which Khartoum owed South Sudan, but is now pardoned per the agreement. There will also be an additional cash grant of $3.03 billion to be paid by South Sudan to Khartoum to improve on its economy.
The agreement has forced the new nation to become "the biggest donor on earth to a single country, Sudan", Machar added.
He further analyzed that the figure is equivalent to $40 per barrel if the whole amount lost were to be translated into how much South Sudan could pay per a barrel of oil it produces.
He however reiterated the necessity of the deal, adding that South Sudan was willing to buy peace and win Khartoum to become a good neighbour.
The international community, he said, should now come forth to assist the new nation in financing major development projects in the country.
Sudan and South Sudanese delegations are expected to resume talks on the other unresolved issue during the last week of this month. A presidential summit is also planned by the mediation in September.
After the signing of a comprehensive deal the two countries have to seek international financial assistance. Khartoum which is affected by the US sanctions needs Juba support to convince the Congress to remove it.
- Egyptian stocks plummet as Yemen confict deepens
- Mission to Mars: UAE plans Arab region's first unmanned probe
- Supervising the stoners: Egyptian tobacco traders call for the legalization of cannabis
- Ethiopia launches $2.8m research survey for Nile basin development
- UAE sweetens flotation regulations to attract more investment