Monday, June 27, 2011

Sudan and Black Gold

Sudanese President Omar al-Bashir has threatened to shut pipelines carrying South Sudan's oil if a deal; the south could continue to hand over half of its oil revenue to the north, or it could pay for using the north's oil infrastructure, is not reached before it secedes in July.
The BBC's James Copnall in the capital, Khartoum, says oil accounts for about 98% of the south's income, so any reduction in the oil flow would be disastrous.
Abdullahi al-Azreg, Sudan's UK ambassador, told the committee preparing the report that Norway had been advising both sides on negotiations for the split. "They have suggested a kind of financial transitioning in which Sudan - the predecessor state - will have 50% of the oil revenue, but this percentage will diminish to zero over six years," he said.
South Sudan's UK envoy Daniel Peter Othol said the south would consider its options, and that building an alternative pipeline through Kenya could take three years to complete.
A new report published by the House of Lords, the UK's upper chamber of parliament, highlights the many issues that will bedevil future Sudanese relations, including oil.
The report - The EU and Sudan: on the Brink of Change - says that in the last six years the south has received around $11bn (£6.8bn) from its oil so far, but there is little to show for these revenues.
The report concludes that "the risk that the new country of South Sudan will fail as a state is high, even if the international community maintains the current levels of assistance and support".

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