South Sudan will announce plans for an oil export pipeline through East Africa next week, a priority for the new nation because its crude is “no longer safe” in Sudan, a government spokesman said on Saturday.
Landlocked South Sudan took about three quarters of Sudan’s roughly 500,000 barrels per day of oil production when it seceded from Sudan in July under a 2005 peace deal, but it still relies on Sudan’s infrastructure to export crude.
Oil is vital to both economies -- it accounts for almost all of South Sudan’s government revenues -- but the two countries have yet to agree how much South Sudan should pay as a transit fee.
South Sudan threatened to halt crude output within two weeks on Friday, after its northern neighbour started seizing crude to compensate for what Khartoum calls unpaid fees.
“The pipeline is now a priority. The minister of petroleum and mining will announce next week which pipeline we are going with and the consortium that will be involved,” Barnaba Marial Benjamin, South Sudan’s information minister and government spokesman, told Reuters by telephone.