South Sudan ships first oil cargo via North amid talks to defuse row

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South Sudan said on Sunday it had shipped its first oil cargo through Sudan to international markets since 2011, while its vice president visited Khartoum to defuse a row that threatened the cross-border flows vital to both.

Sudan told its landlocked African neighbor three weeks ago it would close the two cross-border export pipelines to Port Sudan within two months unless Juba gave up supporting rebels operating across the shared border.

South Sudan, which needs to export oil through Sudan, denies the claims. In a previous dispute over pipeline fees, South Sudan in January 2012 shut down its entire output of around 300,000 barrels per day, but both agreed in March to resume the flow.

South Sudan’s information minister, Barnaba Marial Benjamin, said the first cargo of state-owned oil had left Port Sudan on the Red Sea, without giving details. The African country previously sold 1 million barrels of oil in its first tender since restarting output.

The first shipment of non-government South Sudanese oil took place earlier this week, and traders said it probably belonged to China National Petroleum Corp (CNPC), which had sold 1.2m barrels at the start of June.

Khartoum had said it will allow the sale of oil already on Sudanese soil.

South Sudan’s Vice President Riek Machar met at noon with Sudan’s President Omar Hassan al-Bashir at the start of a two-day visit, a Sudanese official said. Machar’s delegation also included Oil Minister Stephen Dhieu Dau.

The dispute between the neighbors threatens to hit supplies to Asian crude buyers such as CNPC, India’s ONGC Videsh and Malaysia’s Petronas, which run the oilfields in both countries.

Diplomats said they doubted Sudan would close the two cross-border export pipelines, because its economy also has been suffering without South Sudan’s pipeline fees.

Oil was the main source of revenue for Sudan’s budget until the south’s secession in July 2011, when Khartoum lost 75 percent of its oil production and its status as oil exporter overnight.

Both countries accuse each other of backing rebels on the other’s territory, one of several conflicts stemming from the division of what was once Africa’s largest country.

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