South Sudan Threatens to Cut Oil Supply Through Northern Pipeline

South Sudan accused Khartoum of trying to charge too much for use of the northern pipeline and said it might shut it down, signalling a further rise in tension as both sides argue over dividing oil revenues.

The south took 75 percent of the country’s oil production of 500 000 barrels of oil when it became independent on July 9.

But it depends on the north to use its refineries and the only cross-border pipeline to the Red Sea outlet of Port Sudan to sell the oil.

“The amount of money Khartoum wants us to pay is unreasonable,” said David Loro Gubek, the undersecretary at South Sudan’s ministry of energy and mining.

“If Khartoum insists that unless we pay they are not going to allow us to use these things, then the Republic of South Sudan… could request them to close the pipeline.”

For use of its oil facilities, Sudan has demanded fees worth a third of the export value of the oil. Both sides have so far failed to agree on usage fees in a row that could disrupt supplies from one of Africa’s largest producers.

Gubek said the south might seek other alternatives including building a separate oil pipeline if the north insisted on fees worth a third of the export value of the oil.

“We are not the only country exporting oil through their neighbour’s land… Why should ours be terribly high?” Gubek said. “If we are forced, we will put in a separate pipeline.”

Khartoum wants $32 (R230) a barrel to use the pipeline, its port and refineries to sell the southern oil.

Earlier this month, Sudan halted a 600 000 barrels crude cargo from South Sudan in a dispute over customs fees.

Companies including Chinese firms were ready to fund a separate pipeline in South Sudan, Gubek said, adding it could take about two years to connect to a pipeline in Kenya.

China vowed to support Sudan and South Sudan and help them build their oil industries.

It has kept close economic and political ties with Sudan and now also wants to reach out to the south.