South Sudan sells first oil

South Sudan has sold its first oil as an independent country this week, despite the lack of an agreement on oil revenues with Sudan.

South Sudan, which declared independence from Khartoum on 9th July, sold 1 million barrels to Chinese buyer Chinaoil, a Petrochina subsidiary, on Monday 18th July. Reuters estimates the shipment to be worth US$110 million.

Director General for Energy in South Sudan, Arkangelo Okwang, said they would ship a further 600,000 barrels on 23rd July.

Okwang said he expected the north to bill the South for the use of its facilities, but that nothing had yet been decided.

Sudan fought a decades-long civil war, which ended with the signing of the Comprehensive Peace Agreement (CPA) in 2005. The CPA outlined a revenue-sharing agreement for oil, in which Sudan and the autonomous South Sudan each received 50 per cent.

Three-quarters of Sudan's 500,000 barrel-a-day output comes from the South, and is crucial to both countries economy. While much of the oil lies in South Sudan, the new nation lacks the infrastructure to exploit its reserves, and so the oil has to be moved to market through the north.

While South Sudan's President Salva Kiir said in June, 2010 that it would be possible for oil revenues to continue to be shared, he has taken an increasingly hard line in recent months.

On Wednesday 20th June, Kiir threatened to stop using the pipelines in Sudan if Khartoum insisted on sharing oil revenues as opposed to receiving transit fees.

“I am saying that we will rent the North's oil pipelines and we will give them money for our oil to be transported, and we will of course pay and there is no problem," Kiir said at a speech to a military base in South Sudan.

"However, this offer is unaccepted by the North. We have agreed on one thing that the oil issue should not be disrupted. They [Sudan] need oil. But we fought for 21 years without oil and we can still go for 3 years until we build our own oil infrastructure,” Kiir added.

Lead negotiator for South Sudan on oil issues, Pagan Amum, was reported in the Sudan Tribune as saying that the north had asked for “unfair and unreasonable” conditions of passage.

“They came with crazy ideas saying they are going to impose several transit fees – a usage fee, something called a normal transit fee, then something called a special fee – maybe $15 per barrel, even more – then maybe other charges, and they wanted revenue-sharing to continue,” Amum said.

Amum said the south was instead prepared to offer $3bn in “assistance” to the north and offered transit fees in line with international norms, citing 41 cents per barrel charged by the Chad-Cameroon pipeline, which is a similar-length.

Khartoum is keen to salvage as much from the south's oil supplies as possible, and Sudan's Finance Minister Ali Mahmood Hassanein said on 19th July that Khartoum was in the process of crafting laws which would set the fees they would expect the South to pay.

He said the fees would contain three levels based on the fact that oil passes through Sudan which requires the imposition of sovereign fees.

Khartoum has threatened to cut shipments of oil from the south along its piplines if the south refuses to pay transit fees or continuing sharing oil revenues. Likewise, Juba has said it will build its own oil infrastructure, moving the oil south, if Khartoum doesn't agree on transit fees.

A delegation from the South is expected to travel to the north to carry out talks soon.

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© 2011 Menas Associates

Troika letter on the challenges facing Sudan and South Sudan

On Saturday 7th May, a letter was published in The Guardian by representatives of the Troika countries - Norway, the UK and the US - on the challenges facing Sudan and South Sudan.

It was written by Norway's Minister of Environment and International Development Erik Solheim , the UK's Secretary of State for International Development Andrew Mitchell , and US Agency for International Development administrator, Rajiv Shah.


The letter is copied in full, below.

Two months from now, Africa faces a momentous change, as the continent's largest country divides into two – the republics of Sudan and South Sudan.

The division is the result of the January 2011 referendum on self-determination for southern Sudan provided for under the 2005 comprehensive peace agreement (CPA) that ended Sudan's civil war, one of Africa's longest and bloodiest conflicts. Of more than 3.8 million southern Sudanese who voted, nearly 99% chose secession. This new chapter offers an opportunity for the Sudanese to put the conflict of the past behind them for good.

Norway , the UK and the US, longstanding humanitarian and development partners of Sudan and guarantors of the CPA, are supporting the creation of two economically viable and peaceful states that enjoy good governance and respect for human rights. We are also committed to assisting those affected by conflict and poverty. As representatives of the three guarantor countries, we are visiting both Khartoum and Juba this weekend to make clear our support for these goals.

Several key parts of the CPA are incomplete, and many issues remain to be decided between north and south before separation on 9 July. These include determining the border; security arrangements; citizenship issues; wealth, sharing including oil revenues; a framework for future north-south co-operation; and the status of Abyei (a community that straddles the north-south border). We are greatly concerned by an impasse in talks on some of these critical issues. We call on the parties to make the final tough decisions needed to create sustainable economic, political and security arrangements between the two future states.

Sudan and South Sudan will be each other's most important neighbours thanks to economic, historic, geographic and cultural ties. It is in the interest of all Sudanese that there be mutual trust and respect for each country's security and stability. The livelihoods and practices of pastoralists – the herders who traditionally traverse the north-south border zone – must be protected and accommodated. A " soft " border between north and south allowing for trade and the easy movement of people would benefit all Sudanese. Allegations of support to proxy forces by both sides are serious, and should be independently investigated. The CPA rules out the existence of armed groups outside the two established forces of the parties

To help reduce poverty, increase transparency, and utilise revenue from natural resources, including petroleum, for the benefit of the citizens of both states, both governments should join the Extractive Industries Transparency Initiative , which supports sustainable economic growth and government accountability to citizens. Both north and south must also diversify their economies, reduce their reliance on oil, increase their food security through agricultural development, and expand health, education, water and sanitation services.

We must also not lose sight of Darfur, where much still needs to be done to finally resolve the conflict in that region. For nine years, Darfuris have endured violence, displacement and poverty. This situation is deplorable and intolerable. For long-term stability and development, there must be an inclusive and just peace in Darfur, with all groups and voices represented in the political settlement. We will continue to work intensively with all parties towards this goal.

Despite the challenges inherent in separating and launching a new nation, this is a time of opportunity for all of Sudan. Stability and co-operation across north and south will benefit all Sudanese. Increasing trade and co-operation between north and south, and with all of Sudan's neighbours, will provide economic opportunities for youth, who make up more than half of Sudan's population, and for women and girls, who have not had full access to opportunities for education and employment.

We urge the international community to press for peace and development throughout Sudan, so that this region that has endured far too much suffering will not return to conflict. We urge the governments of north and south to urgently resolve the outstanding issues before 9 July to ensure a firm footing for their future relations. We believe that the UN has an important role to play in supporting these two new states after the end of the CPA, and look forward to ongoing discussions on its future role. And we are committed to continuing to help the governments and people of both countries develop in peace and partnership, offering hope and a brighter future for all Sudanese.

Source: The Guardian

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President Al-Bashir threatens South Sudan over

Sudan's President Omar Al-Bashir has threatened not to recognise the new country of South Sudan if it tries to claim the disputed border region of Abyei.

The South Sudanese voted overwhelmingly to separate from the north in a January referendum, and will become independent on 9th July, 2011.

The referendum was part of the Comprehensive Peace Agreement (CPA), signed in 2005 to end the decades-long civil war.

Abyei is a border region claimed by both sides. It was due to have its own referendum in January to decide whether to stay with the north or join the south, but it was delayed due to disagreements over who should be eligible to vote.

Both sides have increased their military presence in the border regions since and there have been numerous clashes, causing dozens of deaths.

The Dinka Ngok, a southern ethnic group, are permanent residents in Abyei, but the Arab, and Khartoum-backed, Misseriya population spends part of every year in Abyei as they move with their cattle, searching for pastures.

Al-Bashir accepted the results of the January referendum and had previously said he would be the first to recognize the new state. But in a speech on 26th April, he threatened to withhold recognition if the South continues to claim Abyei.

"I say it and repeat it for the millionth time, Abyei is northern and will remain northern," he declared during a speech in Southern Kordofan state, which sits close to Abyei and has a large Misseriya population.

The issue has arisen because South Sudan has recently released a new draft constitution, which lays claim to Abyei. The constitution was accepted at a constitutional endorsement meeting chaired by South Sudan's President Salva Kiir on 2nd May. It now needs to be passed by the South Sudan Legislative Assembly, which is dominated by the ruling Sudan People's Liberation Movement (SPLM).

Many within South Sudan have voiced opposition to the new constitution, which grants a new four year term to Kiir, arguing that they had not been adequately consulted.

The South Sudan government is also facing more violent opposition, and there are at least seven rebel militas fighting to overthrow the government, which they say serves only its own interests, ignoring minority tribes and rural communities.

Numerous talks over Abyei in recent years have amounted to little and both sides appear unwilling to compromise over ownership. Analysts say it could return the country to civil war, which has plagued it for the majority of its post-colonial period.

Sources: BBC News, Reuters, Sudan Tribune

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South Sudan names itself

South Sudan has been chosen as the name of what will be the world's newest country when it comes into existence on 9th July, ending months of speculation.

Other suggested names had included Nile Republic and Cush, a reference to a Biblical-era kingdom in the area.

Some 99 per cent of southern Sudanese voted for independence from the north of Sudan in a referendum held in January.

The name decision was announced after a meeting of the top committee of the south's ruling SPLM party.

The SPLM's Secretary General Pagan Amum said the decision, made by the party's politburo, will require approval by parliament.

But that is a formality as the SPLM holds the vast majority of seats in the assembly.

Mr Amum said negotiations were under way with the north about how to go forward with the partition and he warned of the challenges ahead.

"We are a baby nation that has just been born - and like a human baby, we are fragile but have the potential to become great," AFP news agency quotes him as saying.

He said the current pound currency would be replaced by a new currency, also to be called the pound.

The referendum on independence for the oil-rich south was part of a deal to end decades of north-south conflict.

The week-long vote itself passed off peacefully, but tension remains high in parts of the oil-rich area which straddles the north and south.

Many issues remain to be resolved before the new country is formed, including how to deal with oil revenue. The south of Sudan contains most of the oil fields, but they have to be transported through the north.

Under the Comprehensive Peace Agreement (CPA), which brought the civil war to an end in 2005, the two sides split oil revenues evenly, but Amum announced on Tuesday 15th February that would not be the case any longer.

"The notion of sharing wealth will not be there. There is no continuation, whether 50 percent or anything," Amum said according to Reuters.

He said they will only pay a fee for using the pipelines that transport the oil to Port Sudan.

The fate of the oil-rich Abyei region is yet to be determined, although Amum said the SPLM will hold talks with the north's ruling National Congress Party (NCP) on Friday 18th February to discuss the region.

The Abyei region was supposed to have its own referendum on which State to join in January, but it was postponed when the two sides could not agree on voter eligibility.

Last week, some 200 people were killed in south Sudan's Jonglei state in fighting involving those loyal to rebel leader George Athor. Most of those killed were civilians. The SPLM has accused the north of backing Athor, while Athor blames the clashes on the southern army.

Sources: BBC News, Sudan Tribune

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Sudan: President Omar Al-Bashir accepts secession

Official referendum results have been announced in Sudan and President Omar Al-Bashir has said he accepts the South's secession.

The final result was formally submitted on Monday 7th February to al-Bashir by Southern Sudan Referendum Commission (SSRC) head, Mohamed Ibrahim Khalil , who said that a total of 98.83 per cent of people had voted for independence in the week long referendum which took place last month. Khalil said that no legal challenges had been lodged against the result and that the referendum was conducted in " a fair and transparent " manner.

Khalil presented the results to al-Bashir at Khartoum's presidential palace, with south Sudan leader Salva Kiir present.

Al-Bashir said he accepted the result: " We are with the choice of the southern citizen and sustaining peace in the north and the south ." Al-Bashir immediately issued a Republican Decree accepting the final result, which said, " We declare our acceptance of the southern Sudan people's choice and we pledge to work for resolving the outstanding issues and build constructive relations between north and south Sudan ."

Kiir welcomed al-Bashir's reaction, saying that it would pave the way for other countries to follow suit.

" If the north does not recognize the south no other state will ," Kiir said.

He highlighted that secession is not the end of the road, saying that the borders between north and south would only be ' on paper ' and that there would be freedom of movement of trade and citizens.

" We will not become enemies of each other and will make sure our relationship remains strong ," he said.

The announcement of official results was met with jubilation in the south, and thousands of people gathered at the John Garang mausoleum in Juba to hear the results being announced. Some expressed dissatisfaction that the results were being announced in Khartoum, rather than Juba, but that did not stop the celebrations taking place throughout the soon-to-be separate country.

The result was quickly welcomed by the international community. US President Barack Obama said he was pleased “ to announce the intention of the United States to formally recognize Southern Sudan as a sovereign, independent state in July 2011 ." The US has said they will remove Sudan from the list of State's sponsoring terrorism if they accept the result.

Britain 's Prime Minister David Cameron also welcomed the announcement of the results and the postive reaction of the government in Khartoum. He pledged the UK will continue to support the settlement of the remaining issues.

The UN Secretary-General's Panel of the Referenda in the Sudan, which was established to monitor the process, gave the referendum the seal of approval and welcomed the result, saying it reflected the free will of the people of Southern Sudan.

Some in the north also celebrated the separation of the south. The separatist northern Sudanese Forum of Just Peace (FJP) slaughtered a bull outside the SPLM headquarters in Khartoum, chanting slogans such as " goodbye to unity of tears and blood " or " secession is the true independence ". Many of them wore t-shirts with a new map of North Sudan.

The FJP was founded by Al-Tayeb Mustafa , an uncle of President al-Bashir. He has been accused on inciting hatred and racism through his writing, especially in the journal ' Al-Intibaha' (The Alert), which is the mouthpiece of the forum.

Southern Sudan will become a new country on 9th July 2011, with the end of the six-year interim period, as dictated by the 2005 Comprehensive Peace Agreement , which brought the twenty-year civil war to an end. There are still many outstanding issues between the north and the south that must be resolved by July, including how to deal with oil revenues, ownership of the Abyei region, and completion of the north-south border.

Sources: BBC News, Sudan Tribune

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Sudan: SAF and SPLA pen oil safeguard deal

Sudan Armed Forces (SAF) and Sudan People's Liberation Army (SPLA) have penned an agreement to safeguard the flow of crude oil from Sudanese oil fields. The signing of the new deal coincides with mounting fears among oil companies over post-referendum violence.

The referendum - expected to take place on 9th January in southern Sudan - is key in the 2005 peace deal which ended a two decade civil war between the north and the south of the country. Under the deal, known as the Comprehensive Peace Agreement, the south formed its own government, which has limited autonomy and in which the north has only a small representation.

The safeguard agreement stipulates unity between the SAF and the SPLA in protecting the country's oil fields up to July next year. This will be based on a political arrangement to be agreed once the referendum results are announced.

The build up to the referendum has triggered mass resignations by oil workers for fear of outbreaks of violence related to the vote.

"We reaffirm to those working in those companies, as cited by the content of this agreement, the full commitment of the Sudanese federal government and the government of south Sudan to provide security and safety to them and to their activities," said Sudanese vice-president Ali Osman Taha.

Sudan produces around 500,000 b/d and contributes to both the south and the north's budgetary revenues.

Speaking about the safeguard deal, Sudan's Oil Minister Garang Deng said, "We hope that crude oil will keep flowing in case of unity or secession. This is because by benefiting from oil, we have improved the living conditions of the Sudanese people up to a certain level, both in north and south Sudan."

Source: Tribune Business News

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