South Sudan Moves to Shut Down Oil Production

Posted January 23rd, 2012 at 10:40 am (UTC-5)
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South Sudan says it has taken the first steps toward halting oil production, a new escalation in its dispute with Sudan over oil revenue.

Minister of Information Barnaba Marial Benjamin tells reporters that South Sudanese oil fields began shutting down Sunday, two days after the government warned it may stop production. He says oil companies have been given two weeks to bring operations to a complete stop.

South Sudan has accused Sudan of stealing hundreds of millions of dollars of southern oil that flows through its pipelines. Sudan's government began taking the oil last month, after the south balked at paying what it considers excessive fees to use the north's infrastructure.

The newly-independent south lacks pipelines or a port of its own.

A shutdown in oil production and the resulting loss of revenue would likely hurt both Sudans. China, a major buyer of Sudanese oil, has urged the sides to resolve their differences through negotiations.

South Sudan's President Salva Kiir and Sudan's President Omar al-Bashir are scheduled to discuss the dispute this week on the sidelines of the African Union summit in Ethiopia's capital, Addis Ababa.

South Sudan took over about 75 percent of Sudanese oil production when it split from the north last July.