South Sudan oil exports to resume as border row settled
South Sudan's blocking of crossing points at Jodha and Heglig affected the flow of oil because engineers and equipment could not move freely, Mr Karti said in the Ethiopian capital Addis Ababa, where Sudan's President Omar al-Bashir and South Sudan's Salva Kiir met at an African Union summit.
"They agreed on upgrading the level of co-ordination on the borders to be left to ministers of defence," Mr Karti said.
South Sudan resumed crude oil production last month after it stopped pumping in January 2012, accusing neighbouring Sudan of stealing $US815 million worth of its oil, which Sudan said it had taken to recover unpaid transport and processing fees. That and other disputes, including over border security, brought the countries to the brink of war a year ago.
Oil production might be affected if the location of the two border points are not agreed upon, South Sudanese Foreign Minister Nhial Deng Nhial said.
The problem should not have prevented exports resuming after South Sudan pumped crude at the rate of as much as 150,000 barrels a day since May 3, he said. "I believe there are sufficient quantities of oil in the system for oil lifting at Port Sudan to start anyway," Mr Nhial said.
Before the stoppage, oil exports generated 98 per cent of South Sudan's revenue. The crude is pumped mainly by three companies: China National Petroleum, Malaysia's Petroliam Nasional and India's ONGC Videsh.
Frequently Asked Questions about this Article…
Exports were delayed because of a border dispute with Sudan. South Sudan had blocked crossing points at Jodha and Heglig, preventing engineers and equipment from moving freely. Earlier, South Sudan also stopped pumping in January 2012 after accusing Sudan of taking about US$815 million worth of its oil, a dispute Sudan said related to unpaid transport and processing fees.
Sudanese officials said South Sudanese oil may arrive at the Red Sea port by the end of the week after the two countries' leaders met to resolve border issues and agreed to upgrade coordination on those borders.
If the precise location of the Jodha and Heglig crossing points is not agreed, oil production and exports could be affected because ongoing access restrictions stop engineers and equipment from servicing pipelines and facilities, disrupting the flow and lifting of crude.
After resuming crude production, South Sudan pumped at rates of as much as 150,000 barrels a day since May 3, according to officials quoted in the article.
The article names three main companies involved in pumping South Sudan crude: China National Petroleum (CNPC), Malaysia’s Petroliam Nasional (Petronas), and India’s ONGC Videsh.
Before the stoppage, oil exports generated 98% of South Sudan’s revenue, highlighting how critical export flows and pipeline access are to the country’s finances.
Leaders of Sudan and South Sudan met at an African Union summit in Addis Ababa and agreed to upgrade coordination on border matters, leaving specific oversight to ministers of defence—an agreement officials said paved the way for exports to resume.
Everyday investors tracking this story should watch developments on border coordination and access at Jodha and Heglig, confirmation of oil lifting at Port Sudan, and reported production rates. Also note which firms operate there—CNPC, Petronas and ONGC Videsh—because operational or geopolitical disruptions in the area can affect their exposure to South Sudan crude.
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