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The Oil Target: South Sudan

Updated on December 27, 2013

The threat of new mass killings like those in Rwanda during the 90's is still there. In the past few weeks, the new nation has been fighting Sudan with up to 500 or more killed. Gun battles have been unleashed between the two warring sides. South Sudan, was until recently, part of Sudan. Even before the official new country came into existence, tribes in and around where oil reserves were discovered, fought each other for control of those areas and also because of the intense hatred between them. Even within the new country are are deep divisions between various tribes. Intense fighting erupted between units of the SPLA Division 1st and 7st—the fight broke out when nearly all soldiers of both divisions declared their defection to Machar’s forces by firing bullets in the sky.These units defected to the Nuer tribe.

South Sudan is part of a international attempt to create a nation because of its oil reserves under it. It became a nation in 2011 and since then, the USA has given it over $300 million a year to prop it up and China\India have both heavily invested in building its oil industry hoping much of its oil will be exported to them. The violence reignited between ethnic groups in the capital of Juba and quickly got nasty like Rwanda, some 42,000 people are now in UN camps out of the 60,000 that sought to avoid the mayhem. The oil producing area, Unity province, is not operating. This is an area that Sudan disputed was also theirs.

It seems now that one tribe, Nuer, now controls the oil areas, while the tribe that was elected, Dinka, has halted an attempted coup by the former president. Corruption is also an issue, some say that $4 billion have been diverted by the current government officials.

As to the oil, South Sudan's only way to export it is currently via its former enemy, Sudan, using a pipeline to the seaport. Of course, Sudan, demands high fees (up to $100 million) to use the pipeline that goes across its country. To avoid this, South Sudan is considering of building either a railroad or oil pipeline to Kenya.

For South Sudan, with the oil areas in rebel control, its production is halted. Just in July, the country sold 6.4 million barrels of oil worth $300 million. The oil fields can produce 300,000 barrels daily. The longer the oil fields are shut down, the longer it will take to start them up again. In August, the country sold over 3.2 million barrels to China and India.


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