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Khartoum to Shut Oil Pipelines if South Won't Pay

Source: Reuters 6/22/2011, Location: Africa

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Sudan's President Omar Hassan al-Bashir threatened to shut down oil pipelines if the south refuses to pay transit fees or continue sharing oil revenues after it secedes next month. South Sudan will become a separate country on July 9, but the two sides have yet to come to a final arrangement on how to manage the oil industry after the split. Nearly three-quarters of the oil output comes from the south, but most of the refineries, pipelines and ports are in the north, meaning the two will need to cooperate to some degree to keep crude flowing.

Under a 2005 peace deal that ended decades of civil war between the two sides, Khartoum gets about 50 percent of the revenues from oil found in the south. "Either the split continues, or we will take our due from any barrel that passes through our land," Bashir told an audience in Port Sudan, referring to transit fees. "If they don't want that, we will shut the line."

Sudan's oil minister said that north Sudan had agreed to accept transit fees from the south, but the two sides had yet to set a price. They were also discussing a "transitional arrangement" which would ease the financial impact on the north of losing revenues from the south's oil, the minister said. Southerners voted to secede in a January referendum. North and south Sudan have warred for all but a few years since 1955 over religion, ideology, ethnicity and oil.

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