South Sudan, which separated from Khartoum on July 9 following decades of civil war, produces 75 per cent of the former country’s oil but exports it through northern infrastructure.
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South Sudan’s government responded angrily to the move. “We consider it a sign of irresponsible and abusive anger which does not show any sense of leadership in the government of Sudan,” Elizabeth James Bol, South Sudan’s deputy oil minister, told reporters.
“I assure highly that we will protect the sovereignty of South Sudan and we will have complete national ownership of the oil sector in South Sudan,” she said.
Talks between the two former enemies are currently taking place in the Ethiopian capital, Addis Ababa.
Analysts had thought that mutual self-interest would make oil a means to cement relations between the two former enemies. Both countries rely on oil revenues but the two sides have repeatedly failed to agree compensation for the split, which will deprive the north of estimated revenues of at least $5.4bn, according to IMF figures.
Relations between the two countries have worsened as they negotiate a whole package of deals, from oil sharing to determining the frontier and agreeing the fate of Abyei, a disputed territory on the border.
Khartoum and Juba accuse each other of funding proxy militias on either side of the border. Rebel militia in the south have in recent weeks threatened to march on southern oil hotspots, and there has been a series of bombing campaigns along the border.
South Sudan, which must build everything from roads to a civil service almost from scratch, relies on oil for 98 per cent of its revenues. The fledgling country has repeatedly threatened to build an alternative pipeline to export its crude, but operators in the country say that given current oil reserves it is not economically viable.
Mr Osman said although Sudan would permit commercial companies operating in the south to continue exporting, it would not traffic South Sudan’s own oil until the two sides agreed how much Juba would pay as a transit fee.
Mr Osman said South Sudan had so far accrued a debt to Sudan of about $727m for transit fees between independence and the end of October.