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Khartoum lays claim to southern oil reserves

Sudan will take almost a quarter of South Sudan's oil reserves as "payment in kind", it was announced Wednesday. Khartoum and Juba have been embroiled in a bitter dispute over how much the south should pay to use northern infrastructure.

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AFP - Sudan will take 23 percent of the south's vital oil exports as payment in kind, after unsuccessful talks in Addis Ababa, but will not block Juba's exports, Sudanese officials said on Wednesday.

"In the interim period, we are not going to charge the full fee. We will deduct about 23 percent as payment in kind," a senior oil ministry official told AFP, speaking on condition of anonymity.

Khartoum and Juba are locked in a bitter dispute about how much the south, which gained independence in July and produces some 75 percent of the country's 450,000 barrels per day of oil, should pay to use the north's infrastructure.

The escalating dispute prompted China, the largest foreign investor and main buyer of Sudanese oil, to urge both sides on Tuesday to "exercise restraint" in their negotiations.

Sudan's oil ministry said on Monday that it had blocked southern exports, claiming the Juba government had failed to pay transit fees of $727 million covering the period from July until the end of October.

The announcement provoked a hostile response from Juba.

But Sabir Mohamed Hassan, Khartoum's chief negotiator on economic issues explained, after returning from the talks in Ethiopia, that the south was in fact continuing to ship its oil through the north.

"The south has access (to our facilities) and it will continue to export, and it is in our interests that they continue to export through our territory," he told a news conference.

"(But) we've told them that we have a responsibility to take our dues in kind, and that is exactly what has happened in the past few days," he added.

Further underlining the lack of progress on this increasingly rancorous issue, he said Khartoum is seeking to charge South Sudan 36 dollars per barrel for the use of its oil infrastructure, a fee rejected by Juba as "extortionate."

"This is extortionate to us. It's discriminatory and it's not based on a cost principle," southern oil minister Stephen Dhieu Dau said on his return from the negotiations.

He said that if Khartoum prevented southern oil cargoes from loading, the south would have to shut in its oil production, due to a lack of storage facilities at the Port Sudan export terminal.

"If they continue to prevent our oil to go to the market... it will lead to full shutdown."

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