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South Sudan rebels seize control of oil-rich state’s capital

BY MADING NGOR and WILLIAM DAVISON

ADDIS ABABA, Ethiopia (Bloomberg) -- South Sudanese rebels seized control of the capital of oil-rich Upper Nile state, the only region in the world’s newest nation that is still producing crude almost two months after violence erupted.

The renegade forces captured the town of Malakal when they repulsed an attack by government soldiers, “pursued them and flushed them out from near the airport,” Lul Ruai Koang, a spokesman for the insurgents, said by phone today from Ethiopia’s capital, Addis Ababa. “As of now, our forces are in full control in Malakal.”

South Sudan’s government and rebels led by former Vice President Riek Machar agreed a cease-fire on Jan. 23 that sought to end clashes that began on Dec. 15 after President Salva Kiir said Machar, whom he fired in July, led a failed coup. Machar denies the accusation. Violence spread swiftly, pitting members of Kiir’s ethnic Dinka community against Machar’s Nuer group.

The fighting left thousands of people dead and forced at least 860,000 more to flee their homes, according to the United Nations. The two sides resumed peace talks in Addis Ababa last week.

South Sudanese army spokesman Philip Aguer said Malakal was attacked earlier today by forces loyal to Machar. “Fighting is continuing,” he said by phone from the capital, Juba.

South Sudan, which gained independence from Sudan in July 2011, has sub-Saharan Africa’s third-biggest oil reserves, according to BP Plc data.

While oil production has been halted in Unity state because of the violence, output in Upper Nile state has been unaffected so far and is pumping 160,000 to 200,000 barrels a day, South Sudanese Foreign Minister Barnaba Marial Benjamin said Feb. 11.

The country’s low-sulfur crude is prized by Japanese buyers as a cleaner-burning fuel for power generation. The country has the capacity to produce as much as 350,000 to 400,000 barrels per day, Benjamin said.

China National Petroleum Corp., India’s Oil & Natural Gas Corp. and Petroliam Nasional Bhd., the main producers of South Sudan’s oil, evacuated employees from the country because of the fighting.

02/18/2014

 

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