Sudan extends oil flow shutdown deadline

Published July 29th, 2013 - 05:51 GMT
It needs at least 140 days to ensure safe shutdown and not the 60 days stipulated by Khartoum last June
It needs at least 140 days to ensure safe shutdown and not the 60 days stipulated by Khartoum last June

Sudan's oil ministry has officially informed oil companies that the deadline for stopping flow of South Sudan's oil through its territories has been delayed until August 22 in response to a request made the African Union mediator Thabo Mbeki and the Chinese government. A pipeline that transports crude oil from the south to Port Sudan (Reuters) On Thursday, the Greater Nile Petroleum Operating Company (GNPOC) warned that it will not accept responsibility for damages to oil facilities caused by shutting down deliveries of crude oil from South Sudan by the deadline of August 7.

GNPOC it needs at least 140 days to ensure safe shutdown and not the 60 days stipulated by Khartoum last June. Sudan's state's minister of oil Faisal Hammad said that the new deadline represents an opportunity for South Sudan's government to prove its ability and seriousness to implement the cooperation agreement signed between the two countries last year. Hammad added that the extension of the ultimatum was made in response to a decision by president Omer Hassan al-Bashir, pointing out that oil companies have received formal notification of the new deadline.

Last week, Bashir agreed to a request made by Chinese and AU officials to postpone for at least two weeks the deadline by which Sudan will shut down the pipelines carrying oil from landlocked South Sudan. In September of last year, both Sudan and South Sudan signed a series of cooperation agreements, which covered oil, citizenship rights, security issues, banking, border trade among other issues.

In March this year the two countries signed an implementation matrix for these cooperation agreements but in June, Bashir ordered the suspension South Sudanese petroleum exports through Sudan's oil installations, accusing Juba of providing shelter and support to Sudan Revolutionary Front (SRF) and Sudan People Liberation Movement-North (SPLM-N). Juba denies the charges and in turn claims that Khartoum is backing rebels in South Sudan's eastern Jonglei state. South Sudan responded by reducing its oil output to 160,000 barrels per day from 200,000 barrels a day.

On Tuesday South Sudan's oil minister, Stephen Dhieu Dau, said that his country will complete the shutdown of its oil production by next week. Dau said Juba implored upon its northern neighbour not to follow through on its threat and warned that the pipelines risk being damaged for good thus posing a loss to Khartoum and other investors. South Sudan only restarted oil production in April after ending pumping around 300,000 barrels per day in January 2012 when the former civil war foes failed to agree on pipeline fees.

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