South Sudan demands presence of oil companies in negotiations

Published December 20th, 2011 - 08:34 GMT
“We feel that since discussions on the oil fees and tariffs are in the interest of the oil companies as well, the Government of South Sudan has suggested that oil companies be involved in the next round of the negotiations,” said Pagan Amum
“We feel that since discussions on the oil fees and tariffs are in the interest of the oil companies as well, the Government of South Sudan has suggested that oil companies be involved in the next round of the negotiations,” said Pagan Amum

The Government of South Sudan (GoSS) has made proposals to have representatives from oil companies included in the next round of post-session negotiations mediated by the African Union High Level Implementation Panel (AUHIP), Pagan Amum, its chief negotiator said on Monday.

The new proposal, Amum added, will assist in overcoming the “principle of discrimination” and give all parties a platform to follow discussions on tariffs and costs being put forward. “We feel that since discussions on the oil fees and tariffs are in the interest of the oil companies as well, the Government of South Sudan has suggested that oil companies be involved in the next round of the negotiations,” said Amum.

Talks between North and South Sudan recently hit a deadlock when the former rejecting the latter's proposal of a US$5.4 billion offer, and instead demanded that South Sudan pays US$7.4 billion. But Amum, who addressed representatives from various oil companies in Juba, the South Sudan capital, largely blamed the north for its hardline stand, which he said is responsible for its economic woes. “Our offer to Sudan is based on the awareness that the needs of the people of South Sudan are more than they can ever imagine.

But for the Sudan government to turn down such an offer is ridiculous,” said Amum, who is also secretary general of South Sudan's ruling party; the Sudan People's Liberation Movement. During the meeting, both GoSS and representatives from the various oil companies also resolved to make a memorandum of understanding, to be signed later this week, while the transitional agreement between the two parties will be finalised in January 2012. Last week, Amum said, the Khartoum government reportedly sent a letter to GoSS warning that no vessel carrying South Sudan's crude oil will be permitted to leave Port Sudan unless US$32.2 per barrel is paid as a transportation fee - ten time the international standard. Amum said the new directive, which he described as Sudan's “Christmas gift” to the South Sudan, is likely to create uncertainty among oil buyers and further create more tension between the two neighboring nations. “The Khartoum government said this was a temporary measure they have come up with until the two parties resume negotiations on the oil issues,” said Amum. He also the challenged oil companies to come up with a proposal similar to that made by South Sudan so that the Khartoum government is not prompted to shut down its pipelines.

Responding to Sudan's recent terminal fee structure, South Sudan's chief negotiator rejected the deal, saying they cannot pay twice the amount initially agreed upon by the Thabo Mbeki-led panel. The new tariffs, which he said was unrealistic, included Khartoum's demands that South Sudan pays US$6.5 per barrel as terminal fees, in addition to US$6 in transit fees. Landlocked South Sudan has been investigating an alternative export route for its oil;a pipeline to the Kenyan coast.


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