{{South Sudan has almost halved its oil production as it faces new “problems” exporting crude to Sudan, it said on Tuesday, suspecting its long-time rival had closed a cross-border pipeline, a move that would be a sign of friction.}}
Sudan’s Oil Minister Awad al-Jaz denied crucial oil exports had been halted but the Sudanese pound fell on the black market close to a record low as traders worried an economic crisis would worsen.
The cut in oil production is bad news for both African countries which have been suffering since South Sudan shut down its oil output of 350,000 barrels a day in January 2012 over a row with Sudan over pipeline fees. Oil is the lifeline for both.
The neighbours agreed in March to resume crude exports from landlocked South Sudan through northern oil facilities and defuse the tension that has plagued them since their messy divorce in 2011.
But mistrust remains deep between the neighbours who fought one of Africa’s longest civil wars until 2005 and again came close to armed conflict in April 2012 over oil fees and disputed territory.
“There has been a problem with the oil production on the side of Sudan,” Mawien Makol Arik, spokesman for South Sudan’s foreign ministry said in the capital Juba.
He said the charge d’affaires of China, which controls South Sudan’s oil industry, had told the Juba government there was only a technical issue with the cross-border oil flows.
“But we suspect it is political. We suspect that Sudan has shut down the oil pipeline,” Arik said, adding that his government had cut the output to 105,000 barrels per day (bpd)from around 200,000 bpd previously.
“If it is closed down it will cause problems for us because we have no storage facilities left,” he said.
The Sudanese oil minister denied the two pipelines had been shut and said oil from three southern fields had arrived so far.
“South Sudan’s oil is flowing normally on Sudanese soil to the export ports,” Jaz told state news agency SUNA. “Work between Sudan and South Sudan is continuing according to the joint cooperation plan signed between the two countries.”
The Sudanese pound fell to 6.9 against the dollar, down from 6.4 a week ago – the official rate stands at around 4.4. Traders said they worried a dollar shortage driving up inflation would worsen unless pipeline fees from South Sudan arrived soon.
Like the South, Sudan needs dollars to pay for basic food items such as wheat and sugar.
{reuters}
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