South Sudan, Ethiopia Sign Oil Pipeline Deal

(HN, 2/9/2012) -- South Sudan has signed a memorandum of understanding with Ethiopia allowing it to build an oil pipeline through Ethiopia to the port of Djibouti.

Barnaba Marial Benjamin, South Sudan’s information minister, said on Thursday than an unidentified Texas company could start working on a new pipeline in six months, the independent Sudan Tribune reports.

Land-locked South Sudan has been in a political dispute with Sudan’s government over oil transit fees – South Sudan gaining control over most of the region’s oil reserves in July, when it became an independent country, relying however, on export pipelines through Sudan.  

Last month, South Sudan accused Sudan of seizing more than $800 million worth of it oil from Port Sudan along the Red Sea.

Khartoum says it took the oil because the south would not pay transit fees on more than $30 per barrel.

In recent weeks, South Sudan has also discussed plans with Kenya to build oil pipelines to the coastal town of Lamu.

There has been much tension between Sudan and South Sudan, and leaders on both sides have said a return to war is possible.

The two countries have not been able to agree on how to demarcate their border or how to share oil revenue.

South Sudan said Wednesday it had completed the shutdown of 871 oil wells that were producing about 350,000 barrels per day. 

So far negotiations, hosted by the African Union, have failed to find a resolution to the oil row. 

- HUMNEWS Staff