Sudan Oil Crisis: Extortion and misappropriation are not ‘negotiations’

By Eric Reeves

January 29, 2012 (SSNA) — A crisis that has been months, indeed years in the making has come to a head with the decision by the sovereign nation of the Republic of South Sudan to shut down all Southern oil production in the face of continuing extortion, theft, and misrepresentation of oil production and oil revenues by the Khartoum regime.  Predictably, the international response takes the form of urgent pleas for Khartoum and Juba to "compromise."  But this urgency should have been evident months ago, certainly when Khartoum first cleaved to a preposterous transport fee of $32 per barrel of crude oil (subsequently raised to $36 per barrel).  This is not a negotiating starting point; indeed, it is the opposite of negotiation: with such a demand Khartoum is creating such a vast gulf between a reasonable starting point and what might actually be negotiated as to make those negotiations impossible.

And yet, unilaterally, Khartoum has imposed this massive transit fee—without even a remote parallel anywhere else in the oil-transport world—and applied it retroactively to all oil that the South has shipped to the terminal at Port Sudan on the Red Sea.  Here it is important to recall that the regime’s machinations have been multiple and complex: they include seven years of manipulating figures for oil revenues and production, costing the South hundreds of millions of dollars; over-pumping wells in the South in ways inconsistent with maximum lifetime production; drilling horizontally from northern wells into reserves in the South—and the list goes on.  Most recently Reuters reports that Khartoum is selling Southern crude at a steep $14 per barrel discount as a way of accelerating purchase.

Despite the clearly articulated declaration by Juba that it would be compelled to shut down Southern oil production if Khartoum insisted in "negotiation" by extortion and outright theft (a number the details of this theft have been confirmed by oil companies operating out of Port Sudan; see excerpts in Appendix below). In announcing formally the decision of his government to shut down production and commit to a new pipeline running south to the Kenyan coast, President Salva Kiir specified just what had occurred to prompt this final decision:

"I am here today to brief this august house about the current crisis in our oil industry. The crisis has reached a stage that is unacceptable. On the 6th of December 2011, the Minister of Finance of the Republic of Sudan informed our Minister of Petroleum that based on their Petroleum Transit and Service Fees Act of 2011, as from 25 December 2011, all shipments will be allowed to leave Port Sudan only after paying fees amounting to 32.2 dollars per barrel. Immediately following this warning, they proceeded to block four ships with 3.5 million barrels of Dar blend from sailing out of Port Sudan. They have further prevented four other ships from docking at Port Sudan. These ships have purchased 2.8 million barrels of Nile and Dar blends but are unable to collect their purchases. To date, these eight vessels remain under the control of the Government of Sudan with oil worth 630 million dollars."

"In addition to this, they have forcibly taken another 185 million dollars’ worth of oil. In total, the revenue that the Government of Sudan has looted since December amounts to approximately 815 million dollars. Furthermore, they have completed constructing a tie-in pipeline designed to permanently divert 120,000 barrels per day of South Sudan oil [to refineries in the north] …. " (Statement to the National Legislature of South Sudan on the current oil crisis, January 23, 2012)

But while the move toward this decision has been in evidence for months, only now are the AU, the UN, and the U.S. responding—and predictably (certainly predictable for Khartoum) the pressure is almost equally on both countries.  And, in a despicable conflation of issues, both the UN Secretary-General and the U.S. special envoy Princeton Lyman are linking the humanitarian crises in Blue Nile and South Kordofan to resolution of the oil dispute:

"South Sudan and Sudan could face a ‘major humanitarian crisis’ if they fail to solve a running oil dispute, a top U.S. envoy [Princeton Lyman] said Sunday [January 29, 2012] as African heads of state converged on Ethiopia’s capital for an African Union summit." (Associated Press [Addis Ababa], January 29, 2012)

This is simply outrageous: Khartoum militarily seized Abyei (and its Diffra oil production site) on May 21, 2011, immediately creating an urgent humanitarian crisis for the more than 100,000 Dinka Ngok who were forced to flee to the South.  On June 5 Khartoum began its assault on South Kordofan and the Nuba people, all in the name of suppressing the Sudan People’s Liberation Army-North.  Atrocity crimes and violations of international law were rampant.  Ethnic slaughter, aerial bombardment of civilians and civilian agriculture, and the denial of virtually all humanitarian access have been the hallmarks of this brutal campaign.  The international reaction to both these military actions by Khartoum was feeble and disingenuous.  Predictably, Khartoum then launched yet another military assault, on Blue Nile, beginning September 1; this assault has followed the same pattern of massive civilian displacement, relentless aerial bombardment, and virtually total collapse of the critical fall sorghum harvest.  And again, all humanitarian access to civilian populations is being denied by Khartoum, even for assessment purposes.

This—not the failure of Juba to yield to an extortionate deal on oil revenues—is what has created the massive humanitarian crisis in the border regions.  These are the actions that have already taken a great many civilian lives, and will continue to take more lives as people begin to starve or die from malnutrition-related causes in ever greater numbers.

The scale of this rapidly growing humanitarian crisis has become steadily more apparent over the past half year; we know that many hundreds of thousands of civilians in Blue Nile and South Kordofan are in desperate need of food.  The Famine Early Warning System Network (FEWS-Net) has since December been predicting famine-like conditions soon in the Nuba Mountains of South Kordofan and much of Blue Nile; in early October the UN’s Food and Agriculture Organization declared that the harvest in Blue Nile would "largely fail."  And yet the reaction of the international community was slow, diffident, and unjustifiably skeptical of evidence that was rapidly accumulating.  Only now are some actors of consequence finally acknowledging what is at stake in civilian lives.

But to connect this vast, ongoing humanitarian crisis to the economic crisis created by Khartoum’s intransigent, extortionate, and duplicitous negotiating behavior is an outrage.  Instead of condemning this identifiable theft and misappropriation (again, see excerpts below), the AU, UN, U.S. and UK have all put pressure on Juba to accommodate Khartoum’s behavior, trying simply to compel a deal, whether fair or not.  This is diplomatic grotesquerie.  At the very time that Khartoum’s military aircraft continue their deliberate attacks against civilians in northern Sudan, as well as refugee camps and refugee gathering points in South Sudan, the regime is being accorded an unencumbered negotiating position in Addis Ababa.  Indeed, there are some voices, even among journalists reporting from Addis, that would seek to make this a matter of Southern intransigence in refusing to accept an oil deal.

The leaders of the South see this international accommodation of Khartoum, and realize that there will never be any meaningful pressure on the regime to honor any agreement it might make about the future of oil revenues, transit fees, port fees, etc.  The leaders in the South and in the border states of northern Sudan see that even as Khartoum is creating a vast military encirclement of the Nuba Mountains, even as its artillery fire has blocked a choke-point for civilians fleeing South Kordofan, the world says nothing and does nothing to change the thinking within the regime.  How likely is it, they ask, that the same international community—now expediently pressuring them to avert war by making a conspicuously unfair deal—will serve as guarantor of the terms of any agreement reached?  To ask the question is to see all too clearly the answer.

To be sure, Khartoum has bowed to pressure from Ethiopia’s Meles Zenawi and others, and has released three ships loaded with South Sudanese crude.  But this is a gesture—perhaps significant, perhaps not—that does not address the fundamental problem of Khartoum’s attitude toward the issue of oil revenues through transit fees.  Nor does it rectify the losses incurred by the South, coming to many hundreds of millions of dollars beyond the cargo of these ships.  Presently, Khartoum continues to calculate, unilaterally, what it is "owed" by the South on the basis of a $32 per barrel transit fee.  And again, this figure is simply extortionate and serves no meaningful purpose in true negotiations of a reasonable transit fee.  Its only logic is that it would afford Khartoum the means to close the yawning gap in this year’s national budget.

Diplomacy based on "moral equivalence" is doomed

The crises in Sudan cannot be addressed from a posture of "moral equivalence," one that sees the political, diplomatic, and moral equities of the two parties as somehow equal. And yet this continues to be the pattern—one reason that the north/south civil war lasted as long as it did.  A recent piece by AU advisor Alex de Waal in The New York Times (January 24, 2012) offers a glaring example of just such specious equivalence, focusing on the crisis in negotiations over oil, but with a tendentious elision of key facts.

In one sense, what we are seeing is a reprise of the international response to the dispute over Abyei, in which again an intransigent Khartoum first refused to allow the stipulated self-determination referendum in Abyei—this followed excessive high-level U.S. pressure on Juba to "compromise"—and then shortly before Southern independence, Khartoum simply ignored the terms of the Abyei Protocol and the findings of the Permanent Court of Arbitration (PCA; The Hague, July 2009), and brought overwhelming military force to bear in seizing the region.  Abyei is deeply important to the South historically and a fertile region that, even as geographically attenuated by the PCA, is almost the size of the state of Connecticut.

Why should the South put any trust in those who betrayed them on Abyei, refused to respond to the well-documented atrocity crimes in South Kordofan, and have refused to compel Khartoum to allow humanitarian relief corridors for many hundreds of thousands of displaced and highly distressed civilians.  The UN High Commission for Refugees (UNHCR), which confirmed the recent (January 23) aerial attack on the refugee staging point of el-Fog (Upper Nile, South Sudan), and declared itself "alarmed," nonetheless can’t even bring itself to name the attacking aircraft as belonging to Khartoum’s Sudan Armed Forces—the only force in the area with offensive military aircraft.  Khartoum of course simply denies that it was responsible, and there the matter rests—except for those attacked.  Seeing itself so timidly accommodated, Khartoum has, unsurprisingly, been yet further emboldened.  Aerial attacks on the sovereign territory of South Sudan, going back to November 2010, now number twenty-nine (  There were two attacks in Raja County, Western Bahr el Ghazal on December 28 – 29, 2011; a spokesman for the South reported that 40 people had been killed in these attacks.  There was another attack on Khor Yabous, which has received almost no news attention, except from the BBC (January 24, 2012):

"Upper Nile’s Information Minister Peter Lam Both did accuse Sudan of carrying out another air raid in the state on Sunday [January 21, 2012]. He told the BBC that three people were killed and four wounded in Khor Yabous, near the border with Sudan. He also said South Sudan’s army had fought off an attack by militias around this time."

Moral equivalency finds yet another form in the assertion that Juba and Khartoum are somehow equally responsible for proxy forces operating in one another’s territory.  But while we have very substantial, indeed compelling evidence from the Small Arms Survey of weapons shipments by Khartoum to Southern renegade militia forces, there is no comparable evidence that Juba is doing the same in either South Kordofan or Blue Nile.  This is not to say that there is no such assistance, though the consensus of regional observers is that Juba’s support is more of the moral than the material sort.  Rather, it is highly improbably that significant quantities of either men or materiel are moving from the South into the conflict regions.  Notably, there is no evidence that weapons captured by the SAF from the Sudan People’s Liberation Army-North (SPLA-N) have their origin in the South, and we may be sure that if such evidence existed Khartoum, would immediately exploit it for maximum propaganda effect.  Sheer repetition of the charge of Southern assistance to northern rebels has translated into the view that something has actually been established.  This is misguided.

Moreover, while Khartoum has every incentive to arm and supply destabilizing militias such as the South Sudan Liberation Army, which targets mainly civilians, the opposite is the case with Juba, which has shown extraordinary restraint in the face of repeated, ongoing, confirmed military assaults, including aerial assaults on its sovereign territory and the seizure of Abyei.  Juba has done everything possible to avoid being provoked into renewed conflict, even as it senses that war is moving inexorably closer. 

It is in the context of Khartoum’s unsupported charges of Southern support for the Sudan People’s Liberation Movement/Army-North—and the explosive potential deriving from Khartoum’s compelling of the shutdown of oil facilities in the  South—that we should read recent comments by the Second Vice-President of the National Islamic Front/National Congress Party regime:

"[Second Vice-President] Al-Haj Adam Youssef, has warned that his country’s army could strike as far as South Sudan’s capital Juba in pursuit of hunting rebels operating in South Kordofan and Blue Nile…. Youssef vowed that SAF would pursue the rebels into South Sudan and as far as its capital Juba. ‘If necessary, Juba is not far,’ he told the [al-Sahafah] newspaper during celebrations of Sudan’s independence in the central state of Al-Jazzirah." (Sudan Tribune, January 27, 2012)

These words are designed for the international community—a transparent effort to threaten war if Khartoum doesn’t get its way in negotiations over oil.  And here the international community is deeply culpable, with its penchant for misguided accommodation of violence in Sudan and its susceptibility to Khartoum’s threats.

What are Khartoum’s calculations?

It seems still an open question as to why Khartoum would push the South to the extreme measure of shutting down oil production, which provides some 98 percent of Southern revenues.  There are two possibilities.

The first is that the regime overplayed its hand in a reckless game of brinksmanship, convinced that the South would never really shut down its revenue life-line—or believing that the international community would force the South to reverse such a decision if made.  The latter possibility is high, and has been made to seem more likely by events in Addis Ababa this week.  And after all, it’s not really brinksmanship if you can drive over the "brink" and fall into the safety net of international support and coercive diplomacy.  But in fact the South has completed its shutdown of oil facilities, has properly cleaned and purged the pipelines, and has been exceedingly careful not to damage infrastructure.  Many felt they would not be able to accomplish even this task, or at least professed to believe the South incapable. 

If Juba refuses to accede to international pressure to make an unfair deal, then Khartoum’s brinksmanship will have been proved a mistaken calculation—disastrously so.  The threat coming from having overplayed its hand would also explain Khartoum’s decision to release three cargo ships carrying Southern crude from Port Sudan.

The other distinct possibility is that Khartoum has never wanted to make a deal about oil revenues with Juba, but rather to create a casus belli, by which it would seize the oil regions of the South and restore all oil revenues to a northern economy that continues in a politically dangerous tailspin.  The bellicose language of Vice-President Youssef is certainly consistent with such ambition.  So, too, are the repeated aerial attacks on territory of the South.  The extortionate figure of $32 per barrel as transit fee was preposterous to begin with; but to raise that figure gratuitously to $36 per barrel is evidence that there has never been any serious intent to reach a deal.  The unilateral appropriation of oil from the South, the diversion of oil from the South to northern refineries, the rapacious extraction techniques employed over many years, and the bad faith that extends back twenty-two years—all could serve as evidence that there has never been a real commitment to allowing the South to enjoy the benefits of its natural resources.

The threat of renewed war is underscored in an extraordinary dispatch by the Sudan Tribune (January 29/30, 2012), in which we learn that some 700 Sudan Armed Forces (SAF) officers recently confronted senior regime officials over the demand that the army prepare for renewed war with the South, an account that comes from numerous sources:

"The [officers’] message was delivered last week to [President Omar al-] Bashir and [Defense Minister, General Abdel-Rahim Mohamed] Hussein during their briefing sessions with SAF senior army officers who listened to the pair calling on them to prepare for the possibility of a full-scale war with South Sudan."

"But the sources said that the SAF officers at the briefing were all but appalled at the prospects of heading to war with Sudan’s southern neighbor given the state of the military at this point. The officers called on Bashir and Hussein to urgently address the challenges faced by the SAF emphasizing that the army has been unable to decisively overcome the rebels in the border states of Blue Nile and South Kordofan."

This unprecedented account also reveals growing divisions in Khartoum following the "silent military coup" by senior generals last May:

"The SAF officers also implored on Bashir and Hussein to implement segregation between the ruling National Congress Party (NCP) and the army so that the latter does not shoulder the mistakes of the NCP and become vulnerable to volatility of the Sudanese politics. Furthermore, they said that is imperative that the system of government be reformed because the status quo jeopardizes the country’s national security. One of the sources underscored that the current political climate in the form of tensions between the Islamists and the NCP has spread into the army but declined to provide details. He described Bashir and Hussein as ‘rattled’ by the officers’ complaints."

Khartoum’s military strategy in renewed war has long been obvious, if daunting: to attack and hold the largest possible horseshoe-shaped region of South Sudan, with one point of the horseshoe beginning as far west as Kiir Adem (Northern Bahr el Ghazal), going as far south as Bor (Jonglei) and finishing to the east of Malakal—or as much of this area as the generals are confident they can hold and protect militarily.  This region contains nearly all Southern oil production and known reserves. Of course securing this area would require creation of an enormous cordon sanitaire, one that will be exceedingly difficult to maintain and defend, given what would be fierce and relentless efforts by the Sudan People’s Liberation Army to destroy any and all infrastructure contributing to sending oil revenues to Khartoum. 

Khartoum may also be calculating that if it successfully held this territory and hostilities were somehow scaled back, the regime would be able to negotiate an oil deal from a position of maximum strength.  And the international community, given previous behavior, would likely seize on just about any proposal for a cease-fire—much as it settled hastily for a peacekeeping mission in Abyei, only to see Khartoum abuse the agreement and maintain both its regular and militia forces in the region, a de facto annexation.

Moreover, one can all too easily imagine the way in which the regime officials will attempt to "sell" renewed war: "the South is supporting the rebels in Darfur, in Blue Nile, and in South Kordofan"; the decision by the South to shut down oil production amounts to "economic warfare" (ironically, of precisely the sort practiced by Khartoum for the past year), and the north must "fight back."  "The secession of the South is responsible for all the north’s economic woes, and yet Juba refuses to accept some portion of ‘our’ massive external debt" (accrued by this and previous regimes, especially by means of self-enrichment and profligate military spending).  As both Abyei and South Kordofan proved quite clearly, the regime is not short of means to contrive a casus belli.

But the South will not be bullied, will not yield to expedient pleas for "compromise," and will not accept extortion and theft.  The shutdown of oil production sets a clock ticking; for the South will now move quickly on the construction of an alternate pipeline to the south.  Either the international community understands how misguided its diplomacy has been—in the very near term—or war becomes distinctly more likely with every tick of the clock  And in such a war we must expect not only that humanitarian access will be denied in Blue Nile and South Kordofan, but that the remaining humanitarian presence in Darfur will be expelled.

This is the real relationship between (1) the "humanitarian crises" already pervasive in Sudan and (2) oil negotiations between Khartoum and Juba. U.S. special envoy Princeton Lyman is expediently attempting to compel a deal by disingenuously conflating the two; but this only increases the chances that the latter will contribute to the former.


Khartoum sells South Sudan’s oil at discount as Juba vows to sue buyers (Sudan Tribune [Nairobi], January 27, 2012)

South Sudan has threatened litigation against those who purchase its oil from neighboring Sudan after Khartoum reportedly sold crude seized from the newly independent state at millions of dollars discount …. It was revealed on Friday that Sudan has sold a shipment loaded with 600,000 barrels of crude it seized from South Sudan to a north Asian trader at a discount as steep as $14, Reuters reported, citing anonymous sources. According to Reuters, this indicates an $8.4 million discount for the whole cargo versus the last official price charged by the South. The sold crude was loaded onto three tankers from January 13 – 20, according to South Sudan’s justice ministry.

South Sudan says Sudan seized oil worth $815 million (Reuters [Juba], January 23, 2012)

"In total, the revenue that the government of Sudan has looted since December amounts to approximately $815 million," Kiir told parliament in Juba. He accused Khartoum of having built a tie-in pipeline to divert 120,000 barrels per day of southern production flowing through the north.

The justice ministry in Juba published a list of three vessels it said had been forced to load southern oil at Port Sudan on orders from Khartoum. The "MT Sea Sky" loaded 605,784 barrels on January 13/14, the "MT Al Nouf" around 750,000 barrels on January 16/17 and the "MT Ratna Shradha" another 600,000 barrels on Jan 19/20, the ministry said. Officials in Khartoum could not immediately be reached for comment. Foreign Minister Ali Ahmed Karti told Reuters last week that Khartoum was entitled to seize oil to compensate for transit fees.

Khartoum charged with under-reporting oil production in South Sudan (Al-Jazeera, January 29, 2012; citing news agencies)

Separately, South Sudan said on Friday it had discovered new figures that it claimed showed the north had colluded with oil companies to provide lower production figures on paper than was actually being pumped from the ground. Stephen Dhieu Dau, the South’s oil minister, said in some cases oil production was under-reported by as much as 15 per cent.

South Sudan says they won’t restart oil production until Sudan agrees to demands over oil deal (Associated Press [Juba] January 29, 2012)

South Sudan’s minister of petroleum and mining says the nation will not restart oil production unless Sudan accepts a list of demands. Stephen Dhieu Dau said Sunday that South Sudan was "committed to negotiations" but that Khartoum would have to accept their offer of paying $1 per barrel for using Sudan’s pipelines for export and $2.4 billion dollar financial assistance package before South Sudan turns on production again. He also says Sudan must withdraw troops from the disputed border region of Abyei and stop funding rebel groups in South Sudan. He says South Sudan wants an international treaty guaranteed by "international superpowers" to guarantee the agreement. South Sudan shut down oil production Saturday after it accused Sudan of stealing hundreds of millions of dollars worth of oil.

South Sudan Completes Oil Shutdown (Reuters [Juba], January 29, 2012)

Sudan has already sold at least one tankerload of seized South Sudanese crude, but said on Saturday it would free other tankers to help defuse the row. Dau said the four cargoes in question had not left the port yet, but that South Sudan’s agent said it had been told to prepare documentation so it was possible that they would leave later on Sunday or on Monday. South Sudan was "committed to negotiations" but first Khartoum "must take some steps", he said. "First they must release the cargoes, and the stolen crude that was lifted by force must be returned to us, and any deal must be tied to the issues of the border and Abyei, and they must stop sponsoring militias in South Sudan," he said. "This deal must be overseen by the international community.

Khartoum’s actions on Southern Oil

Sudan Tribune [Juba], January 24, 2012)

Khartoum unilaterally decided to take millions of barrels of oil belonging to South Sudan that passes through the 1,610km long pipeline from South Sudan to Port Sudan. It claims that South Sudan has not paid a number of fees amounting to a billion US dollars. However, South Sudan refuted the claims by Sudan, saying it has been paying fees for Khartoum’s facilities such as central processing facility and marine terminal and that the action by Khartoum was "a pure theft."

The payment by Juba to Khartoum for usage of such facilities was confirmed by the international oil companies operating in the oil sector.

Sudan Plans to Seize More South Sudan Oil Until Accord Reached

January 18, 2012 (Bloomberg)

Sudan plans to seize more South Sudanese oil until a final agreement is reached on fees for their transit, amid signs that talks on the tariffs may be failing, said Sudanese Foreign Minister al-Obeid Murawih. South Sudan "doesn’t seem to be serious or willing or cooperative" about the negotiations, Murawih told reporters today in Khartoum, the Sudanese capital. "We will continue seizing oil until we reach a final settlement."

Khartoum orders foreign company to "steal" S. Sudan’s oil (Sudan Tribune [Juba], January 14, 2012)

A foreign oil company on Saturday said it was ordered by the Government of Sudan (GoS) to load 650,000 barrels of South Sudan’s crude oil onto a GOS Vessel MT Sea Sky, a revelation that seems to confirm earlier claims by Juba of its oil being ‘stolen.’ The oil loading process, according to Petrodar Operating Company (PDOC), was "required" by the Khartoum government, "non-negotiable" and overseen by the latter and its national security organisations. The current operator of the Petrodar pipeline in Sudan, which only transports oil from South Sudan territory (Block 3 and 7), PDOC is a consortium of national oil companies mainly from China, Malaysia and India. The company further operates the Al Jabalyn processing facility in Sudan as well as a marine terminal in Port Sudan.

Sudan Tribune (January 28, 2011): Petroleum Minister Stephen Dhieu Dau’s timeline of events:

On the 24th Dec. 2011, Government of Sudan (GOS) prevented loading of
600,000 bbls of South Sudan-Nile blend;

On the 30th, Dec. 2011, GOS detained 100,000 bbls Dar blend sold to Vitol;

On the 31st, Dec. 2011, GOS prevented ships from loading 600,000 bbls of Republic of South Sudan (RSS) Nile blend;

On the 3rd, Jan. 2012, GOS detained vessels loaded with 600,000 bbls of Dar blend of RSS, which belongs to Petronile;

On the 8th, Jan. 2012, GOS detained Sinopec vessels loaded with 900,000bbls Dar blend of RSS;

On the 13th, Jan. 2012, GOS lifted 605,784 bbls Dar blend crude oil of RSS;

On the 16th, Jan. 2012, GOS lifted by force 618,712 bbls Dar blend crude oil of Republic of South Sudan.

Also on the same date, GOS instructed PDOC to transfer 120,000 bbls of Dar blend crude oil of RSS to be delivered to Khartoum refinery directly from the illegal pipeline tie into KRC which was partly constructed and operated by GOS;

On the 19th, Jan. 2012, GOS lifted by force 600,000 bbls of RSS’ Nile blend crude oil. The two neighbours have to come to agreement on a host of post-secession issues including national debt, assets, border demarcation, the disputed oil producing region on Abyei and citizenship.

South Sudan sues Khartoum over confiscated oil

(Sudan Tribune [Juba] January 22, 2012)

South Sudan said on Sunday that it is taking the government of neighboring north Sudan to court over what Juba describes as the "stealing" of its oil. Stephen Dhieu Dau, the country’s oil minister said in an interview with Sudan Tribune that his ministry has filed a lawsuit against Khartoum in "specialised international tribunals." "We are not leaving it just like that. The Sudanese government must return all they have stolen otherwise we are taking them to court," minister Dau said without elaborate on which tribunals. Minister Dau said that in December Khartoum started diverting more than 120,000 barrels per day of oil pumped from the new nation.

EXCLUSIVE: Sudan army officers warn Bashir & Hussein against rush to war with south

(Sudan Tribune [Khartoum] January 29/30)

January 29, 2012 (KHARTOUM) – A group of 700 military officers from Sudan’s Armed Forces (SAF) confronted president Omer Hassan al-Bashir and his defense minister Abdel-Rahim Mohamed Hussein with several demands that focused on military and political reforms, Sudan Tribune is told. Multiple army sources who all spoke on condition of anonymity because of the sensitivity of the issue said that the officers included those stationed in the Sudanese capital Khartoum and other parts of the country.

The message was delivered last week to Bashir and Hussein during their briefing sessions with SAF senior army officers who listened to the pair calling on them to prepare for the possibility of a full-scale war with South Sudan. But the sources said that the SAF officers at the briefing were all but appalled at the prospects of heading to war with Sudan’s southern neighbor given the state of the military at this point. The officers called on Bashir and Hussein to urgently address the challenges faced by the SAF emphasizing that the army has been unable to decisively overcome the rebels in the border states of Blue Nile and South Kordofan.

The Sudanese army is battling rebels from the Sudan People Liberation Movement North (SPLM-N) in the two states since June 2011 in South Kordofan and September 2011 in Blue Nile. Khartoum persistently accuses Juba of providing aid to the rebels but South Sudan routinely denies the charge. This week the second Vice-President of Sudan, Al-Haj Adam Youssef was quoted by local media as threatening to go after SPLM-N rebels even if they had to go all the way to Juba.

"If necessary, Juba is not far," he told the paper during celebrations of Sudan’s independence in the central state of Al-Jezira. SAF needs "tremendously huge efforts" in order to prepare for future dangers particularly at a time when there is talk about foreign intervention, Bashir and Hussein were told.

The officers also urged Bashir and Hussein combat "rampant" corruption within the army and gave an example of 200 battle tanks that were bought in early 2010 but most of it turned out to be defective and a large number had to be sent to neighboring countries for repairs. They noted that several senior officers objected to the "subpar deal" involving these tanks before they were bought which led to the sacking of Hussein’s chief secretary Maj. General Al-Na’eem Khidir and other senior officers including Maj. General Ahmed Abdoon who headed the Nyala army division and Maj. General Al-Tayeb Mosbah of El-Fasher army division.

The SAF officers also implored on Bashir and Hussein to implement segregation between the ruling National Congress Party (NCP) and the army so that the latter does not shoulder the mistakes of the NCP and become vulnerable to volatility of the Sudanese politics.

Furthermore, they said that is imperative that the system of government be reformed because the status quo jeopardizes the country’s national security.

One of the sources underscored that the current political climate in the form of tensions between the Islamists and the NCP has spread into the army but declined to provide details.

He described Bashir and Hussein as "rattled" by the officers’ complaints. Eric Reeves, a researcher at Smith College who writes extensively on Sudan, believes oil is a major factor in this move. "This may well be a dismayed response to the clear possibility that Khartoum never wanted to make a deal about oil revenues with Juba. Rather, the goal was to create a casus belli, by which the army would seize the oil regions of the South and restore all oil revenues to a northern economy that continues in a politically dangerous tailspin" he said. This month a number of memos have surfaced allegedly sent by the Islamist base calling on the NCP to implement political reforms and fight corruption.

One of them was presented in late 2011 by Bashir’s adviser Ghazi Salah al-Deen in his capacity as the leader of the NCP parliamentary bloc. The Sudanese president responded vaguely to some of the demands contained in Ghazi’s memo while saying that it is "premature" to address the others. Sudan is facing a growing economic crisis that was aggravated by the secession of the oil-rich south which took with it 75% of the country’s crude reserves. Since then, Sudan’s oil revenues, which used to make up 90 percent of the country’s exports and were the main source of hard currency inflows, have largely dried up. The government has already banned many imported items to preserve its foreign currency supply.

The Sudanese pound lost a significant amount of its value against the dollar as a result and the black market has flourished despite government warnings.

Khartoum is trying to walk the fine line between the need to cut government spending and cutting subsidies on basic goods and petroleum products which they fear might trigger social unrest. Last year the governor of Sudan’s central bank Mohamed Khair al-Zubeir said that fuel subsidies need to be removed because they are a huge burden on the economy. "Subsidies are a big burden for the state. The biggest subsidy is for fuel," al-Zubeir said, adding that a barrel of fuel was sold locally at $60 compared to a market price of $100. "So far we didn’t notice the difference, subsidies were no problem because the country had oil … [but] we cannot pay this anymore," he added.

The landlocked South Sudan has been in talks with Khartoum on the fair fee that should be assessed for using the north’s refineries and pipelines. It has been reported that Sudan asked for $32 per barrel for the service, something which South Sudan vehemently rejected saying it is excessive compared to international norms. Sudan retaliated to the slow pace of talks and decided to seize part of South Sudan’s oil as payment in kind for the exporting service. Juba responded by shutting down its oil production.

Eric Reeves is a professor at Smith College and has published extensively on Sudan, nationally and internationally, for more than a decade. He is author of A Long Day’s Dying: Critical Moments in the Darfur Genocide.

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