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22 July 2011
SEE ALSO: South Sudan: a new republic built on
oil ; Continuity vital as two Sudans prepare to
talk ; South Sudan plots oil pipeline to
On 9 July, the day South Sudan
declared independence, Nilepet and Glencore sealed a
joint-venture agreement establishing Petronile International.
At the time, Glencore and South Sudans energy ministry
said the venture would market a portion of South Sudans
375,000 barrels a day of crude output.
Today, however, South Sudans
director-general of petroleum, Arkangelo Okwang Oler a
signatory to the joint-venture agreement told reporters:
We have not mandated Glencore to market our oil. They
[Glencore] are not mandated to sell the crude of the
The dispute appears to centre on the
sale of volumes of royalty oil, rather than the equity
production Nilepet holds through its stakes in consortia
producing from South Sudans fields. The exact volume of
oil under dispute could not be ascertained. But South
Sudans total daily production is worth around $40 million
a day to the new nation with Brent crude trading in the
region of $110 a barrel.
Okwang was not immediately available
for comment. But a spokesman from the South Sudan Ministry of
Mines and Energy said: This deal doesn't allow Glencore
to market the governments entitlement oil; the company
may deal only with NilePets entitlements.
He did not give further
clarification. No one at Nilepet was available for comment.
Glencore, however, claims the
joint-venture agreement covers both royalty and equity
production. The trader, which listed in London through an $11
billion initial public offering in May, said the joint-venture
terms make it clear that Petronile International is
responsible for marketing the states and Nilepets
Lual Deng, a southerner who was,
until independence, Sudans oil minister, said he
understood oil marketing was the responsibility of the South
Sudanese oil ministry. By signing the joint-venture agreement,
he said, Nilepet may have exceeded its authority.
But, added Glencore: The
[joint-venture] agreement was signed in Juba by the managing
director of Nilepet [Mangok Kali Mangok] and Arkangelo Okwang
from the energy ministry.
The continent has lots of shale gas, but development will happen more quickly in the south than the north
Three years on, the euphoria surrounding South Sudan’s independence has ebbed away as the country slides deeper into civil war, writes Luke Patey
Two new books tell the sorry tale of South Sudan and Sudan, and the oil at the heart of their dysfunctional relationship. Review by Anthea Pitt