Sudan, South Sudan Start Talks Over Former National Oil Company Assets

KAMPALA, Uganda - Oil producing Sudan and newly independent South Sudan started talks on Monday aimed at resolving a dispute over the sharing of assets belonging to former national oil company Sudapet, said officials.

A South Sudanese delegation from the oil and mining ministry has arrived in Khartoum for talks with their Sudanese counterparts, said Sudanese government spokesman Rabie Abdelaty, as the two former civil war foes continue to disentangle their oil assets.

"Both sides are keen to ensure that the issue of Sudapet is resolved quickly," said Mr. Abdelaty.

The talks are part of the African Union-mediated framework on the implementation of cooperation agreements signed in September last year.

Sudan is demanding up to $2 billion from South Sudan as compensation for assets including buildings, storage tanks, processing facilities and pipelines located in the south. Juba has in the past dismissed Khartoum's claim, arguing that it is the rightful owner of the assets within its territory following its independence in July 2011.

Sudan is also demanding compensation for damage to its oil facilities in the oil hub of Heglig that was briefly occupied by South Sudanese forces in April last year.

According to Barnaba Benjamin, South Sudan's information minister, the talks are expected to yield positive results.

"We have just restarted our oil, things are improving, we are hoping for the best," Mr. Benjamin said.

Land locked South Sudan broke away from Sudan taking control of as much as 75% of the oil fields but has to rely on ports and pipelines, which pass through the north, to ship its crude for export.

The two countries have since been embroiled in a number of disputes over the sharing of oil revenues, which led to the shutdown of the south's 350,000 barrels-a-day of crude last year plunging both economies into turmoil.

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South Sudan to Restart Oil Production Soon

KAMPALA, Uganda - South Sudan hopes to restart oil production "within a few days" after more than a year of closure, following a border security deal with former civil war foe Sudan, a company executive told Dow Jones Newswires Wednesday.

A Sudanese government delegation is expected in Juba, South Sudan's capital on Thursday, to prepare for the finalization of the paperwork required for the resumption of crude pumping, from the South's oil fields, through pipelines and ports that straddle the north, Paul Adong Deng, managing director of state oil company, Nile Petroleum Corp. said.

The resumption of crude production and shipments is critical for both economies, which have been struggling under the burden of a host of economic hardships.

"Once the paperwork is finalized, oil production will start immediately, the facilities are ready," Mr. Deng said, adding that production would start with a few oil fields, before gradually being extended to the country's entire oil blocks, in Upper Nile and Unity states.

The country is expected to initially start pumping around 30,000-40,000 barrels a day of crude as early as next week, before reaching a pre-independence capacity of around 350,000 barrels a day within two months, Mr. Deng added. Analysts expect the country's crude to reach global oil markets by next month.

Preparations to resume oil production have been ongoing for some time, back in early March a top official at South Sudan's national oil company also said oil exports were expected to reach the international market by May after South Sudan and Sudan signed an agreement signaling their commitment to resuming crude-oil shipments from the South through Sudanese pipelines.

Sudanese President Omar al Bashir is expected to visit Juba later this week for the first time in nearly two years, to endorse the oil deal, according to the Sudanese presidency.

Earlier this month, Sudan and South Sudan agreed to pull their troops from contested oil-rich regions along their 1,120-mile poorly marked border, to create a 12-mile demilitarized zone, a condition for the resumption of crude shipments. South Sudan separated from Sudan in July 2011 after two decades of war, retaining around 75% of the oil fields.

Last week, global economic trader, Trafigura announced that it had signed fuel supply deal with South Sudan for the supply of Dar Blend crude oil through Port Sudan.

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South Sudan: 160 Killed in Border Clashes With Rebels

KAMPALA, Uganda - More than 160 people were killed this week in border battles between soldiers and rebels in South Sudan's Jonglei state, officials said on Friday.

At least 143 rebels and 20 soldiers died in several clashes since Tuesday, South Sudan military spokesman Col. Phillip Aguer told The Wall Street Journal.

South Sudan has been trying to quash a rebellion that started earlier this month so it can resume crude-oil shipments.

"Our forces dealt a severe blow to the rebels," Col. Aguer said. "We are now in control of the airstrip which these rebels have been using to get supplies."

The rebels are led by tribal war lord and defeated local-election candidate David Yau Yau. South Sudan accuses former civil war enemy Sudan of backing the insurgent. It denies this.

Landlocked South Sudan seceded from Sudan in July 2011 and retained 75% of the country's oil fields. However, South Sudan relies on pipelines running through Sudan to get its crude oil to ports.

The two disagree over the location of their border. In January last year South Sudan halted crude-oil shipments as the border disagreement escalated.

Earlier this month they agreed to resume shipments after international intervention.

Until January 2012 South Sudan shipped as much as 350,000 barrels a day to refiners in China and Malaysia.

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South Sudan Orders Resumption of Crude-Oil Production

LONDON - The government of South Sudan has ordered the resumption of crude-oil production, days after the country and its neighbor, Sudan, came to an agreement over their disputed border.

In an official document, South Sudan's minister of petroleum and mining, Stephen Dhieu Dau, said, "Foreign oil companies and pipeline operators operating in the [Republic of South Sudan] are hereby ordered and instructed...to recommence and re-establish the production of crude oil."

South Sudan ceded from Sudan in July 2011, taking with it most of the region's oil fields. This week's deal will unlock some 350,000 barrels a day that have been shut-in since January 2012 amid a bitter spat with Sudan over oil transit fees and contested oil-rich regions along the poorly marked 1,120-mile border.

A top official in South Sudan's national oil company told Dow Jones on Wednesday that oil exports were expected to reach the international market by May.

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