South Sudan to shut down oil production by end of July

By Andrew Green and Khalid Abelaziz JUBA/KHARTOUM (Reuters) - South Sudan plans to sell 6.4 million barrels of oil worth $300 million before shutting down its entire production by the end of July due to a row over its alleged support for rebels in neighbouring Sudan, its oil minister said on Saturday. Sudan, the sole conduit for South Sudan's oil exports, said a month ago it would close two cross-border oil pipelines within 60 days and insisted output be shut by August 7 unless South Sudan gave up support for the rebels. Juba denies backing insurgents. The shutdown is bad news for both countries, which fought one of Africa's longest civil wars before separating in 2011. Diplomats worry South Sudan might collapse without oil, the main source for the budget apart from foreign grants. They point to recent looting of aid agencies by soldiers as a sign that Juba is struggling to pay salaries. Closing the wells is also grave news for Sudan, which has been struggling with turmoil since losing most oil reserves with South Sudan's secession. Oil fees from Juba are essential to bringing down soaring inflation, which stokes dissent. South Sudan had only resumed oil production in April, after turning off wells pumping around 300,000 barrels per day in January 2012 when both sides failed to agree on pipeline fees. Oil industry insiders say once the pipelines are closed it will take several months to restart production as they would have to be flushed of water and cleaned first. South Sudan sold 1 million barrels of crude in June and had contracted further sales of 2.2 million for shipment in July and 3.2 million in August, Oil Minister Stephen Dhieu Dau told Reuters. "There is enough crude in the pipeline to meet this," he said. Sudan has said it would allow the sale of oil which has already reached pipelines on its territory or the export terminal on the Red Sea. Dau repeated South Sudan was not backing any Sudanese rebels. "We are committed to the flow of the oil. It is in the interest of the two countries. We don't see that this shutdown can bring any peace or stop internal rebellions in Sudan." "It will have a negative impact on Sudan and South Sudan. Our economies will suffer," he said. Sudan will get pipeline fees of around $100 million until the shutdown, he added. Khartoum accuses Juba of supporting the "Sudanese Revolutionary Front" (SRF), a rebel alliance, which complains of neglect at the hands of the wealthy Khartoum elites. The SRF in April staged an attack on central Sudan, embarrassing the army on whose support President Omar Hassan al-Bashir depends. South Sudan in turn accuses Sudan of backing rebels in its eastern Jonglei state, where fighting is making it impossible to realise government plans to search for oil with the help of France's Total and U.S. Exxon Mobil. Rahmatullah Osman, undersecretary in Sudan's foreign ministry, told al-Akhbar newspaper Sudan would not allow any passage of South Sudanese oil unless Juba cut all ties with insurgents. "There won't be any reversal," he said, adding that Sudan hoped like South Sudan that China would mediate. China dominates the oil industries in both countries, and state firm China National Petroleum Corp is most affected as it runs the oilfields in the South with Malaysia's Petronas and Indian firm ONGC Videsh. (Reporting by Andrew Green in Juba and Khalid Abdelaziz in Khartoum; Writing by Ulf Laessing; Editing by Mark Potter)

 

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US jets drop unarmed bombs on Great Barrier Reef

US fighter jets dropped four unarmed bombs on Australia's Great Barrier Reef in an "emergency jettison" during a training exercise, officials said on Sunday, ruling out any risk to the public or environment. The US 7th Fleet said two Harrier aircraft dropped the ordnance on the iconic reef's marine park off the Queensland coast on Tuesday. "The selected emergency jettison area was in a deep channel away from the reef to minimize the possibility of reef damage," the US 7th Fleet said in a statement. "It is approximately 50 to 60 metres deep and does not pose a hazard to shipping or navigation." An Australian Defence Force spokesman told Australian Associated Press that the bombs posed "minimal risk or threat to the public, the marine environment or civilian shipping transiting the reef area". "Defence is working closely with the US military, the Australian government and environmental organisations to ensure there is no danger... now or in the future," he said. US and Australian officials are seeking to issue an appropriate navigation notice until charts can be updated showing the location of the unexploded ordnance, the 7th Fleet said. The two AV-8B Harrier planes had intended to drop the bombs on a range on a nearby island but were unsuccessful despite several attempts. "After being unable to expend their ordnance during a planning training mission, and having insufficient fuel to reach their pre-designated jettison area, the pilots jettisoned the ordnance in an unarmed condition on July 16," the 7th fleet said. The fleet said each Harrier jettisoned one BDU 45, which are inert ordnance, and one GBU 12, which were dropped in an unarmed state. About 28,000 Australian and US military are involved in training exercise Talisman Saber in Queensland, which began on July 15 and ends on August 5.

 

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