Sudan says it will release oil shipments seized from South Sudan

Sudan said Saturday it would release oil shipments belonging to South Sudan as a goodwill gesture amid a furious dispute over oil to encourage the continuation of dragging negotiations.

“We are ready to continue the talks, and to prove it we are... releasing the vessels in port,” said a senior member of Sudan’s negotiating team, Said Khatib.

Three shipments totaling 2.2 million barrels of South Sudan’s oil are being held in Sudan’s Red Sea port, a blockade that placed an economic stranglehold on Juba, which depends on oil for more than 90 percent of its revenue.

Landlocked South Sudan split from Sudan in July, taking with it three quarters of the country’s oil, but all pipeline and export facilities are controlled by former civil war enemies in the north.

South Sudan accuses Sudan of Khartoum of stealing $815 million worth of crude oil, but Khartoum says the oil it has taken was to compensate for export fees and use of its refineries.

“We started taking the equivalent in kind of what we had been invoicing South Sudan, not a cent more,” Khatib told reporters in the Ethiopian capital, where the African Union are mediating talks between the two sides.

Juba this week began to halt oil production after it ordered a complete shutdown over the dispute with Khartoum, with over half the wells now shut, the South says.

Sudanese President Omar al-Bashir and his South Sudan counterpart Salva Kiir failed to resolve the dispute in talks Friday in Ethiopia.
South Sudan's top negotiator said on Friday his country would complete the shutdown by Saturday..

Sudan said it was freeing the ships to help end the deadlock.

“By doing this step, we expect the cover agreement to be signed, the shutdown to be halted, and the terms of the cover agreement to be respected,” said Khatib.

China is the biggest buyer of oil from the two countries, some 12.99 million barrels last year. That amounted to five percent of last year's crude imports by China, which is also the top investor in South Sudan's oilfields.