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In-Briefs

Sudan/South Sudan: Oil Spat Could Cause Pipeline Closure

January 17, 2012
| Security
| Asia and the Pacific

South Sudan has threatened to close a pipeline to Sudan after accusing Khartoum of blocking the export of 3.4 million barrels of oil on January 10 and of seizing 650,000 barrels of crude oil worth $65 million from South Sudan and loading it onto one of its own ships . . . the squabble began after South Sudan refused to pay a recently increased pipeline fee instituted by Sudan . . . the two countries are scheduled to meet for negotiations mediated by the African Union on January 17 and 23 in Addis Ababa . . . landlocked South Sudan controls nearly three-quarters of the oil of the formerly unified Sudan but is forced to pay fees to use ports in Sudan . . . despite the friction, South Sudan announced that it had signed new oil deals granting exploration and production rights to Chinese, Malaysian, and Indian national oil companies last week . . . in addition, South Sudan plans to double oil production to 700,000 barrels per day  . . . South Sudan is exploring routes for an additional pipeline through Kenya or Ethiopia in order to expand its production and export capacity . . . the longer the conflict lasts, the more both countries will suffer from reduced oil revenues . . . Sudan is likely being aggressive toward South Sudan to deny it funds to build new pipelines to avoid sending oil to Sudanese ports . . . paradoxically, this aggression will only reinforce South Sudan’s determination to develop alternate export routes for its oil.

 
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