US oil companies will soon be allowed to work in South Sudan: official Article Comments (4) Email PrintSave --------------------------------------------------------------------------------
September 17, 2011 (KHARTOUM) – The newly established state of South Sudan may soon see American oil companies operating there, a US official disclosed on Friday. US President Barack Obama (AFP) The US has imposed comprehensive economic sanctions on Sudan since 1997 which made the country off-limits for most American businesses. Many international corporations also stayed away from Sudan for fear of being impacted by US sanctions. Sudanese officials have lobbied Washington intensively to lift sanctions and also remove the country from list of states that sponsor terrorism. But so far only limited relief was granted to the East African nation. Following the emergence of South Sudan as the world’s newest nation, the US indicated that it will be exempt from the sanctions imposed on its northern neighbour. The Office of Foreign Assets Control (OFAC), which is the US agency that is responsible for issuing regulations related to implementation of sanctions, is expected to announce rules by which American companies can work in South Sudan. "I’m sure we’re going to open that door, but the rules of the game are still being worked out and that is very frustrating to the South because they want American oil companies there," US special envoy to Sudan Princeton Lyman told a trade briefing in Washington according to Reuters. "There is a task force working on it and they will, God willing, have something soon” he added. Lyman said the Treasury Department would define new criteria for licensing oil deals that would provide only "incidental" benefits to the North, making some deals with South Sudan possible. The fact that the landlocked South has to use the North’s infrastructure to export its oil may have made slowed down OFAC’s rule-making process. Sanctions drove out Chevron Corp, Marathon Oil Corp and other Western companies, but industry sources say many are keeping their options open about reviving investments in the oil-rich African country. China National Petroleum Corp, Malaysia’s Petronas and India’s Oil and Natural Gas Corp are among the oil firms now operating in South Sudan. But Lyman said that totally lifting sanctions could not be done quickly as it requires congressional approval. North Sudan lost 75 percent of the country’s oil production of 500,000 barrels per day after South Sudan gained independence. The impact of the loss is being felt in the country through chronic shortage in hard currency and tightened government spending. Sudan has been hoping that transit fees for oil produced in South Sudan could provide a reliable source of revenue. But the two sides have failed to agree on the figure to be assessed for using the pipelines in the North. It has been reported that Sudan asked for $32 per barrel for the service, something which South Sudan vehemently rejected. Despite the disagreement, Sudan has continued to allow the South to export its oil through Port Sudan which some attribute to fear of angering China which buys most of the country’s oil. Lyman said US companies could provide valuable know-how and improved technologies to South Sudan’s oil sector to extend the life of wells that some experts say risk sharp production declines within the next five years. But he warned that US interest in South Sudan’s oil opportunities was tempered by serious concerns over corruption and transparency, saying the new leaders in Juba had yet to act on pledges to put monitoring institutions in place. "If they don’t meet that challenge, its going to be a big problem for everybody," Lyman said. (ST) -- You received this message because you are subscribed to the Google Groups "JFD info" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/jfdinfo?hl=en.
