South Sudan ships first oil cargo

South Sudan has shipped its first independently sold oil cargo from Port Sudan, a former minister said yesterday, despite no final agreement with Khartoum on how to manage the country’s vital industry.

“We managed to sell all the cargoes for July. Lifting started on Sunday, at Port Sudan,” and the first cargo left on Monday, Lual Deng, formerly oil minister in Sudan’s government of national unity, told AFP.

Deng, a southerner who left his job in Khartoum and returned to Juba shortly before South Sudan’s formal secession on July 9, said the one-million-barrel shipment of Dar Blend was sold to Chinaoil, a trading subsidiary of Chinese state oil giant CNPC, the largest investor in Sudan’s oil industry.

“It is a sign of cooperation that the north has allowed the first cargo to lift. I am very relieved about this,” said Deng, a senior member of the south’s ruling party, although he currently holds no government position.

Just weeks before southern independence, Sudan’s President Omar al-Bashir said Khartoum would block the landlocked south’s use of its pipeline infrastructure and export terminal if no deal on oil was reached ahead of partition.

Around 80 per cent of Sudan’s 470,000 barrels per day of oil is currently produced in the south, but the two sides have yet to agree on a new revenue-sharing formula or pipeline transit fees at negotiations in Addis Ababa.

Deng said the talks in the Ethiopian capital would resume “as soon as possible”.

Unlike Nile Blend, Sudan’s other main crude stream, Dar Blend is entirely produced in the south, but its poorer quality means it trades at a sharp discount to international benchmark prices.

Monday’s cargo sold at between US$16-20 below Brent North Sea crude, Deng said.

He said the south had independently sold all its production of Dar Blend for July lifting — some 3.2 million barrels — and was already selling cargoes for August.

Khartoum would pay the international price for South Sudan’s production of Nile Blend, he added.