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South Sudan says oil production may resume in September

BY NICHOLAS BARIYO

KAMPALA, Uganda--South Sudan said Monday it may resume oil output in September following an agreement with Sudan over crude-transit fees, although uncertainty remains over the agreed price and the deal remains overshadowed by unresolved security issues along the two nations' common border.

The South Sudanese government said in a statement that oil companies operating in the East African nation will need three to four weeks to resume production, a lifeline for the country' s economy.

"We have been informed by our oil companies that 80% of our [oil wells] in Unity state will be able to resume by September," Pagan Amum, South Sudan' s chief oil negotiator said in the statement.

After months of talks, the formerly united countries last week agreed a deal that will allow South Sudan resume shipments of as much as 350,000 barrels-a-day of oil through Sudanese ports and pipelines for export. However, Sudan has warned that no deal would be signed until there is an agreement on restoration of security in three restive border states, where its army is battling multiple armed groups allegedly backed by South Sudan.

Details of the deal remain sketchy.

According to Mr. Amum, South Sudan will be paying at least $8.40 a barrel for using the pipeline operated by Greater Nile Petroleum Operating Co. and at least $6.50 a barrel for using the pipeline operated by a Chinese-led pipeline consortium known as Petrodar. Both pipelines pass through Sudan to Port Sudan, on the Rea Sea.

The figures couldn' t be independently verified and contradict the $15 a barrel transit fee earlier stated by Sudanese officials.

Company officials couldn' t comment immediately.

Negotiators are expected to return to Ethiopia later this week to continue talks over unresolved issues such as border demarcation and disputed areas such as Abyei.

Dow Jones Newswires

08/06/2012

 

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