Oil Price Slide Exposes Flaws In Juba-Khartoum Transit Fee Deal

Already hit by the loss of around one third of its oil output, South Sudan’s finances have been dealt another body blow by the combination of sliding world oil prices, and a short-sighted negotiating strategy in its 2012 transit revenue deal.

The near $60/B decline in global oil prices since mid-2014 has uncovered a potentially fatal flaw in a key deal signed between South Sudan and its former civil war foe Sudan in 2012 over oil transit fees, that could further exacerbate the South’s economic problems, and drag it deeper into crisis.

South Sudan is now 13 months into a protracted civil war, sparked by growing tensions in the ruling Sudan People’s Liberation Movement (SPLM) and a resulting power struggle between President Salva Kiir and his former vice President Riek Machar. The conflict, which has already claimed the lives of more than 10,000, continues, despite growing international calls for a cessation of hostilities, and peace-talks led by the East African IGAD grouping (Intergovernmental Authority on Development) in the Ethiopian capital of Addis Ababa. (CONTINUED - 1341 WORDS)


table South Sudan Crude Production (‘000 B/D)