Sudan and South Sudan: Renegotiating oil deal

| February 15, 2016

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Sudan and South Sudan’s oil ministers have agreed in principle on a new oil pipeline deal, reports said last week.

The countries agreed to a fixed fee for the use of export pipelines when South Sudan achieved independence in 2011.

But with global prices so low, the fee is more than South Sudan earns for the oil itself, meaning that the country loses money on every barrel it sells.

Stephen Dhieu Dau is South Sudan’s Minister of Petroleum and Mining. He says the new fee will fluctuate, depending on the global price of crude oil.

South Sudan produces an estimated 150,000 barrels of oil a day, down from 350,000 at independence.

Observers say that South Sudan is already behind in its payments to Sudan. Years of financial mismanagement, a previous oil shutdown in 2012, and years of civil war have drained the country’s reserves.

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Photo: South Sudan’s rebel leader Riek Machar (C) greets people as he arrives to hold a press conference in Kampala Credit: AFP/Isaac Kasamani)