Rights Group Urges Mediation in Sudanese Oil Dispute

Posted February 10th, 2012 at 5:30 am (UTC-5)
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International watchdog Global Witness is urging the international community to help end a bitter oil dispute between Sudan and South Sudan, warning the situation could escalate if not resolved soon.

The natural resource monitoring group said Friday that the African Union, China and Western governments should engage “at the highest diplomatic levels to broker a deal between the two sides.”

It said public exchanges between the two Sudans have become increasingly tense, with both hinting that a return to war is possible.

The two countries have been engaged in a dispute over how much land-locked South Sudan must pay to use the North’s oil infrastructure. The South has no refining capacity and relies on northern pipelines to export its crude oil.

Sudan wants South Sudan to pay transit fees of more than $30 per barrel. The industry standard is closer to $1 per barrel.

South Sudan recently shut down its oil production after accusing Sudan of seizing more than $800 million worth of its oil. Khartoum says it took the oil to make up for revenues lost when the South gained independence last July, taking over three-quarters of its oil production.

Tensions have also remained high over disagreements on how to demarcate their border and accusations that each side is arming the other’s rebel groups.

The dispute has hurt both economies. More than 90 percent of South Sudan’s revenues are derived from oil exports. Sudan is said to have lost more than $7 billion when the South gained independence.

Officials from the two Sudans are meeting on the sidelines of the African Union summit in the Ethiopian capital Addis Ababa to secure a deal on sharing oil revenues.

Meanwhile, South Sudan is exploring alternative transit routes for its oil. On Thursday, it announced an agreement with Ethiopia allowing it to build an oil pipeline through Ethiopia to the port of Djibouti.