Bids for Petroleum Exploration Ahead of Addis Negotiations
23 January, 2012
Khartoum, (sundanow.info)- Acting ahead of the petroleum and other economic negotiations between the two Sudanese states in the Ethiopian capital Addis Ababa, the Sudanese Ministry of Petroleum invited tenderers to bid for exploration for oil in a number of blocs in west, east and north Sudan. More than 52 international companies from Britain, Canada, Russia, Brazil, Malaysia, China and other European, Asian and African companies are expected to compete in the bidding.
The economic issue to be deliberated at the negotiations, which are sponsored by the African Union High-level Implementation Panel (AUHIP) chaired by former South African President Thabo Mbeki, will cover the oil and the standing accounts between the two countries (the arrears) and the trade. It appears that the current wrangling, especially on the part of South Sudan, will hang over the negotiations, particularly with respect to the Khartoum government insistence of imposing a specific rate of oil processing, transit and export fees of 36 dollars a barrel across north Sudan up to Bashair Port on the Red Sea, as opposed to a rate of 72 cents a barrel, a fee which Khartoum believes is insufficient for maintenance of the pipelines.
Before departure for Addis Ababa, the Sudanese delegation declared at a press conference in SUNA news agency that the Government of South Sudan (GoSS) would not reach agreement on the fees, although the Southern oil continued to flow through the infrastructure across north Sudan for five months, with Khartoum hoping that an agreement might be worked out. The delegation said, as Juba has failed to reach any agreement, The Government of Sudan (GoS) in Khartoum had to get its rights in-kind as of last December 1st at the rate of 36 dollars a barrel.
Mr. Idriss Mohamed Abdul Qadir, the Presidency State Minister and chief delegate, said at the press conference that the next round of talks would center on the issues of petroleum, trade and financial accounts between the two neighboring countries.
He said the quantity of the Southern petroleum taken by the Sudan since early last December in lieu of the transit fees was not equivalent to the Sudan dues. “We have been harmed of continued exportation by the GoSS of its petroleum across the north for five months without paying the fees of the pipelines, port and other GoS rights on the South.”
This led to “harming the Sudanese economy by increasing the rate of exchange and inflation,” Abdul Qadir said, adding that the fees include the high costs of conveyance and chemical and physical treatment of oil at Hijlij and Jebelain in addition to the fees of storage in the ports and use of the harbor in Port Sudan.
The Government delegate and chairman of the petroleum sub-committee, Dr. Al- Zubair Ahmed al-Hassan, said at the press conference that the GoS kept sending invoices of the fees to the GoSS since the secession of the South on July 9th, but there was no response. “We are therefore compelled to take our right in-kind,” he added, hoping that the negotiations would lead to positive results of reaching an understanding by the two sides.
Although the round of negotiations is devoted for the economic issue, including the use of the Sudanese ports, transit trade, standard specifications, facilitation of trade, duty-free zones, environment protection and cooperation in fighting money laundering, financing terrorism an drugs, the arrears question will be the primary topics of the deliberations, according to the Deputy Governor f the Bank of Sudan and member of the delegation, Badr al-Din Mahmoud.
He predicts that Juba would use the arrears issue as a tool for hindering the negotiations, indicating what he termed as a false claim by the GoSS of 5 billion dollars in arrears they say Khartoum owed them with respect to the oil proceeds share during the transitional period. Mahmoud said his side claims arrears of 6 billion dollars as genuine rights that include funds seized by the Central Bank of Juba out of the foreign exchange reserve and other funds added by mistake to the Southern account in addition to amounts resulting from the southern currency change after the signing of Naivasha agreement in 2005 and Sudapet rights which he said were confiscated by Juba government.
The Bank of Sudan Deputy Governor showed astonishment with the GoSS including the pensions of the Southerners who were serving n the north in the arrears it claims.
Another delegate, State Minister for External Trade Dr. Fadul Abdulla, reviewed at the presser efforts exerted by his government for establishing economic relations with the South.
He said the GoSS, however, turned down a proposal on preferential and border trade between the two countries and refused to join the COMMESSA group of nations. Dr. Abdulla said joining COMMESSA would bring about cooperation between the two countries without custom barriers. Instead, the South decided to join the East African group to which the Sudan is not member. Moreover, the South postponed conclusion of bilateral preferential trade agreements, saying this would be discussed in the future, the State Minister said, adding that Juba insisted that each country be independent from the other.
For her part, Information State Minister Sana’a Hamad said her government commends AUHIP efforts for pushing forward the negotiations by the two countries for reaching concrete solutions to the issues tabled for discussion. She said the delegation was going to the talks wholeheartedly and in good-faith for establishing good relations that would preserve the common interests of the two countries.
With regard to the talks on the financial, economic and natural resources, a trade sub-committee was formed of five members of each side representing the ministries of Finance and National Economy and External Trade, the Bank of Sudan, the Customs Department and the Economic Security Administration.
Following several meetings under the supervision of an AU expert as a mediator, the two sides agreed, in principle, that each state would have fully independent external trade. They also agreed to postpone conclusion of any bilateral agreements for free of preferential trade in view of the South Sudanese economic situation provided that the matter be considered in the future while the trade cooperation and facilitation would remain open between the two countries.
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