Sudan delays shutdown of oil pipelines for weeks

By NICHOLAS BARIYO

KHARTOUM -- Sudan postponed the planned shutdown of key oil pipelines that carry crude from landlocked South Sudan to the export terminal, in order to give African Union mediators more time to resolve outstanding security disputes between the two countries, a government spokesman said.

The new date for the closure September 6, 2013 is a major relief for South Sudan, whose oil shipments through Sudan were due to stop on Aug. 21. The earlier planned closure and subsequent halt to South Sudanese exports was seen as a major economic threat to both nations because they depend heavily on oil income. The prospect of lower exports had also buoyed global oil prices in recent weeks.

The new extension will allow African Union military investigators more time to investigate allegations that both countries continue to back rebels against each other.

"There is some progress, the new deadline is now September 6, 2013 and hopefully, the pipeline won't be  closed, if we resolve the issues through talks said Rabie Abdelaty, Sudan's government spokesman." An African Union delegation and China's special envoy to Africa, Zhong Jianhua, travelled to Khartoum last month, in last ditch efforts to avert the impending pipelines shutdown.

China is the largest importer of crude from both Sudan and South Sudan. Last week, South Sudan said it had paused the scale down of oil flow through Sudan following promising talks with Khartoum. South Sudan continues to pump at least 160,000 bpd of crude through two pipelines that straddle Sudan, its sole oil export route. The volumes are still less than the 200,000 bpd that the country had been exporting since May, before the latest escalation of tensions.

Until January 2012, South Sudan produced at least 350,000 bpd of crude before shutting down its entire production for around 18 months, amid disputes with Sudan. The current oil production started around April and South Sudan had hoped to restore output to pre-closure capacity by around September.

Dow Jones Newswires

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