January 27, 2012 / 8:51 AM / 8 years ago

UPDATE 1-Sudan sells seized S. Sudan crude at deep discount -sources

 * Sudan offers million dollar discounts to sell seized crude
 * North Asian trader loads cargo, heading to Singapore
-trade
 * At least seven tankers held up at Port Sudan

 (Adds comments, details on vessels)	
 By Luke Pachymuthu and Florence Tan	
 SINGAPORE, Jan 27 (Reuters) - Sudan has sold at least
one cargo of crude seized from South Sudan at millions of
dollars discount and is offering more, industry sources said, as
Khartoum looks to recover oil revenue from its former civil war
foe. 	
 A bitter row has escalated between the two over the value of
the transit fee landlocked South Sudan should pay for oil pumped
north by pipeline through its northern neighbour and exported
from Port Sudan.	
 South Sudan is shutting down production in protest after
Khartoum blocked exports and seized some of the oil as
compensation. South Sudan's President Salva Kiir accused
Khartoum of having "looted" revenues amounting to roughly $815
million from crude cargoes.	
 The seized crude was loaded onto three tankers from Jan.
13-20, South Sudan's justice ministry said. 	
 Sudan sold one of those cargoes, a 600,000 barrel shipment
loaded on the vessel Ratna Shradha, to a North Asian trader. The
final price of the sale was unclear, but one trader said that
the cargo was sold at a discount as steep as $14 a barrel. That
would indicate an $8.4 million discount for the whole cargo
versus the last official price charged by the South.	
 "This is crude from the South sold by the North at a $14
discount to the South's last selling price," a Middle East-based
crude trader said. 	
 The tanker is heading to Singapore, another source said.	
 The last time South Sudan sold Nile Blend cargoes, it did so
at a premium of $2.50-$3.00 a barrel to the benchmark Indonesian
Crude Price, traders said. This would indicate that Sudan has
sold the cargo at a discount of around $11 a barrel to the
Indonesian price.	
 Sudan has also loaded two other cargoes of seized Dar Blend
crude, but it is not immediately clear if they have sold those.
Khartoum had offered these cargoes last week at a discount to
official South Sudan prices, traders said. One of them is headed
to the United Arab Emirates port of Fujairah, they added.	
 The South last sold seven cargoes of Dar Blend at discounts
between $5 and $11 a barrel to dated Brent. Sudan offered the
cargoes at a discount of $15-$16, another source said.
 	
 	
 OFFGUARD	
 Buyers of South Sudan oil were caught offguard when Khartoum
started blocking exports in late December. 	
 In addition to the three, at least seven tankers are still
waiting at the port to lift December and January cargoes, raking
up demurrage costs of $20,000-$22,000 per day, traders and
shipbrokers said. Buyers include PetroChina, Glencore, Vitol,
Trafigura and Arcadia, they said.    	
 "There was no reason given. They just held back sailing," a
second trader with a Western firm said, adding that demurrage
costs and the uncertainty were a "nightmare".	
 South Sudan pledged to fully shut its output of 275,000
barrels per day (bpd) in two weeks, a move that could also cut
off supplies to equity holders China National Petroleum Corp
(CNPC), Malaysia's Petronas and India's Oil
& Natural Gas Corp.    	
 A third trader said buyers could declare force majeure if
they still cannot lift the oil 30 days from the date of loading.	
 "Force majeure is the last resort if the cargo has not been
loaded 30 days after the scheduled loading date. As long as the
ship has not loaded the oil," the trader said.	
 "It will be complicated to declare force majeure if the oil
is already on board. How are you going to discharge the oil back
into the shore tanks?"    	
 South Sudan became independent in July under a 2005 peace
agreement with Khartoum that ended decades of civil war but both
sides have failed to agree how to untangle their oil industries.	
	
  SUDAN'S OIL SALES	
 VESSEL      TYPE        STATUS              DESTINATION
 Ratna       Aframax     600,000 barrels     Singapore/Jap
 Shradha                 Nile Blend loaded   an
                      Jan. 19-20          
 Sea Sky     Aframax     605,784 barrels     off Sudan 
                      Dar Blend loaded    port
                      Jan. 13-14          
 Al Nouf     Aframax     750,000 barrels     Fujairah
                      Dar Blend loaded    
                      Jan. 16-17          
 	
 	
  TABLE OF OIL TANKERS AT PORT SUDAN	
 VESSEL       TYPE        STATUS
 Esther       Aframax     To load Dar Blend
 Spirit                   
 Petrovsk     Aframax     To load Dar Blend
 Front        Aframax     To load Dar Blend
 Symphony                 
 Front        Aframax     To load Dar Blend
 Warrior                  
 Vermillion   Aframax     To load Dar Blend
 Energy                   
 Hellenspont  Aframax     To load Nile Blend
 Tatina                   
 Nordic       Aframax     To load Nile Blend
 Zenith                   
 	
Source: Reuters Freightview, trade	
	
 (Additional reporting by Yaw Yan Chong and Osamu Tsukimori in
TOKYO Editing by Manash Goswami and Simon Webb)	
 
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