South Sudan Prepares to Export Crude

KAMPALA, Uganda - Landlocked South Sudan is preparing to sell its first consignment of crude in the international market in a few days, for the first time in nearly two years, amid a row with Sudan over the use of a transit pipeline, officials said Wednesday. 

South Sudan will sell at least 7 million barrels of crude already at storage terminals at Port Sudan to refiners mainly in Asia, as the country seeks urgent revenues to heal its ailing economy, Information Minister Barnaba Benjamin told Dow Jones Newswires. 

"The first consignment will leave Port Sudan by June 20," Mr. Benjamin said. 

The announcement came just a day after Sudan informed South Sudan that it would block crude shipments through its territory within two months unless it stops supporting rebels inside several Sudanese border states. 

"We shall continue engaging Sudan over issues regarding rebel support under mechanisms proposed by the African Union," Mr. Benjamin said. 

South Sudan has an export deal with Switzerland-based trader Trafigura. It has been pumping an average of 200,000 barrels a day since last month after an agreement with Sudan following a 15-month shutdown. 

Relations between the two nations have again soured in recent weeks, after Khartoum accused Juba of continuing to back rebels in the oil-producing states of South Kordofan and Blue Nile, along the common border. Juba has denied the charges. 

South Sudan inherited 75% of Sudan's oil fields when it seceded July 2011 but has to rely on pipelines that straddle the north to export its crude. Until January last year, the country exported at least 350,000 barrels a day through Sudan.

Copyright (c) 2012 Dow Jones & Company, Inc.

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