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South Sudan in Kenyan oil pipeline deal South Sudan in Kenyan oil pipeline deal
(about 3 hours later)
South Sudan has agreed a deal with Kenya to build an oil pipeline, potentially reducing its dependence on its northern neighbour Sudan.South Sudan has agreed a deal with Kenya to build an oil pipeline, potentially reducing its dependence on its northern neighbour Sudan.
It will link its oil fields to Kenya's Lamu port and should be ready in a year, a South Sudan minister said.It will link its oil fields to Kenya's Lamu port and should be ready in a year, a South Sudan minister said.
Industry analysts say such a pipeline would usually take at least three years to build and cost up to $4bn (£2.6bn).Industry analysts say such a pipeline would usually take at least three years to build and cost up to $4bn (£2.6bn).
Last week, South Sudan said it was stopping its oil production because of a row with Sudan over transit fees.Last week, South Sudan said it was stopping its oil production because of a row with Sudan over transit fees.
Since Sudan Sudan spilt from Sudan last July, relations have deteriorated.Since Sudan Sudan spilt from Sudan last July, relations have deteriorated.
The BBC's James Copnall in Sudan's capital, Khartoum, says the announcement of a new pipeline to Kenya is meant to reinforce the message that landlocked South Sudan can do without Sudan and its oil infrastructure.The BBC's James Copnall in Sudan's capital, Khartoum, says the announcement of a new pipeline to Kenya is meant to reinforce the message that landlocked South Sudan can do without Sudan and its oil infrastructure.
Transit fees rowTransit fees row
No date has been set for the start of the project but Elizabeth James Bol, South Sudan's deputy minister for petroleum and mining, says it will be "as soon as possible".No date has been set for the start of the project but Elizabeth James Bol, South Sudan's deputy minister for petroleum and mining, says it will be "as soon as possible".
Is the new country of South Sudan bluffing with its threat of a complete oil shutdown? It is true that most South Sudanese actually live from agriculture, and Western donors would presumably meet some of the shortfall.Is the new country of South Sudan bluffing with its threat of a complete oil shutdown? It is true that most South Sudanese actually live from agriculture, and Western donors would presumably meet some of the shortfall.
But it is difficult to see how South Sudan could continue to pay the salaries of its swollen military without oil money. And if the country's oil wells are shut down too quickly, it will be costly to reopen them.But it is difficult to see how South Sudan could continue to pay the salaries of its swollen military without oil money. And if the country's oil wells are shut down too quickly, it will be costly to reopen them.
Sudan would struggle too. It needs the transit fees to make up the 36% hole in its budget because of South Sudan's secession. Inflation has already sent young people onto the streets to protest - and after more than two decades in power President Omar al-Bashir does not have the same domestic political capital South Sudan's leaders do.Sudan would struggle too. It needs the transit fees to make up the 36% hole in its budget because of South Sudan's secession. Inflation has already sent young people onto the streets to protest - and after more than two decades in power President Omar al-Bashir does not have the same domestic political capital South Sudan's leaders do.
The crisis may well be decided by who blinks first. But the risks are high. The worst case scenario is a return to outright hostility - and even war - if talks over the oil in Addis Ababa break down.The crisis may well be decided by who blinks first. But the risks are high. The worst case scenario is a return to outright hostility - and even war - if talks over the oil in Addis Ababa break down.
She told the BBC she expected the pipeline to be completed in about 11 months.She told the BBC she expected the pipeline to be completed in about 11 months.
"The pipeline will be developed through Kenyan territory and will be built and owned by South Sudan," said a statement from the Kenyan Prime Minister Raila Odinga, who was in Juba for the signing of the deal late on Tuesday."The pipeline will be developed through Kenyan territory and will be built and owned by South Sudan," said a statement from the Kenyan Prime Minister Raila Odinga, who was in Juba for the signing of the deal late on Tuesday.
South Sudan and Sudan - who fought a decades-old bitter civil war - remain at loggerheads, especially over oil on which both countries depend almost entirely for their revenues.South Sudan and Sudan - who fought a decades-old bitter civil war - remain at loggerheads, especially over oil on which both countries depend almost entirely for their revenues.
The south has the bulk of the oil - and 98% of Juba's budget depends on it.The south has the bulk of the oil - and 98% of Juba's budget depends on it.
But the north has the pipeline, refinery and the export terminal at Port Sudan on the Red Sea.But the north has the pipeline, refinery and the export terminal at Port Sudan on the Red Sea.
They have never agreed on the transit fees that Juba should pay Khartoum for pumping oil through its pipelines and using Sudan's oil export infrastructure.They have never agreed on the transit fees that Juba should pay Khartoum for pumping oil through its pipelines and using Sudan's oil export infrastructure.
President Salva Kiir of South Sudan has accused the Sudan government of illegally siphoning off $815m of its crude oil.President Salva Kiir of South Sudan has accused the Sudan government of illegally siphoning off $815m of its crude oil.
Khartoum has admitted to confiscating some for unpaid fees and last Friday South Sudan announced it was shutting down its oil production.Khartoum has admitted to confiscating some for unpaid fees and last Friday South Sudan announced it was shutting down its oil production.
President Kiir said his nation would rather struggle for a bit than continue to hand over its oil revenues to the old enemies in Khartoum.President Kiir said his nation would rather struggle for a bit than continue to hand over its oil revenues to the old enemies in Khartoum.
Talks over oil are due in the next few days in the Ethiopian capital, Addis Ababa.Talks over oil are due in the next few days in the Ethiopian capital, Addis Ababa.
Correspondents say that there are also worries about the impact of the proposed pipeline on Lamu, which is one of East Africa's most beautiful and relatively unspoiled environments.Correspondents say that there are also worries about the impact of the proposed pipeline on Lamu, which is one of East Africa's most beautiful and relatively unspoiled environments.
Sudan: A country divided Show regions
The great divide across Sudan is visible even from space, as this Nasa satellite image shows. The northern states are a blanket of desert, broken only by the fertile Nile corridor. South Sudan is covered by green swathes of grassland, swamps and tropical forest.
Sudan's arid north is mainly home to Arabic-speaking Muslims. But in South Sudan there is no dominant culture. The Dinkas and the Nuers are the largest of more than 200 ethnic groups, each with its own languages and traditional beliefs, alongside Christianity and Islam.
The health inequalities in Sudan are illustrated by infant mortality rates. In South Sudan, one in 10 children die before their first birthday. Whereas in the more developed northern states, such as Gezira and White Nile, half of those children would be expected to survive.
The gulf in water resources between north and south is stark. In Khartoum, River Nile, and Gezira states, two-thirds of people have access to piped drinking water and pit latrines. In the south, boreholes and unprotected wells are the main drinking sources. More than 80% of southerners have no toilet facilities whatsoever.
Throughout Sudan, access to primary school education is strongly linked to household earnings. In the poorest parts of the south, less than 1% of children finish primary school. Whereas in the wealthier north, up to 50% of children complete primary level education.
Conflict and poverty are the main causes of food insecurity in Sudan. The residents of war-affected Darfur and South Sudan are still greatly dependent on food aid. Far more than in northern states, which tend to be wealthier, more urbanised and less reliant on agriculture.
Sudan exports billions of dollars of oil per year. Southern states produce more than 80% of it, but receive only 50% of the revenue. The pipelines run north but the two sides have still not agreed how to share the oil wealth in the future.