South Sudanese Rebels Claim Capture of Oil-Producing State

Dec 23, 2013 12:34 pm ET

(Updates with U.S. military positioning in 17th paragraph.)

Dec. 23 (Bloomberg) -- Rebel forces loyal to deposed South Sudanese Vice President Riek Machar said they captured crude- producing Unity state as the government evacuated some oil workers and plans a partial shutdown of facilities.

Fighters led by General James Kong Chol seized Bentiu, the state capital, and other parts of the northern region on Dec. 21 and have aligned themselves with Machar, Chol said in a phone interview yesterday. It’s the second state to fall to anti- government forces after President Salva Kiir’s administration lost control of Bor, capital of Jonglei province, to a group headed by General Peter Gatdet Yak on Dec. 18. Chol and Yak previously headed government forces in the two states.

“We’re controlling the area of Unity state,” Chol said from Bentiu. “My government planned to kill me and I have nowhere to go. I decided to join Riek Machar.”

Fighting broke out in South Sudan on Dec. 15 when gunmen attacked the presidential palace in Juba, the capital. At least 500 people have been killed in the ensuing violence that has heightened ethnic tensions, with Machar’s Nuer group pitted against the Dinka people of Kiir.

Machar, who is being hunted by security forces, has demanded Kiir step down for failing to unite the nation. Kiir fired Machar and the rest of his cabinet in July. The two sides agreed to an offer by neighboring Kenya to host peace talks, Kenyan Foreign Ministry Principal Secretary Karanja Kibicho told reporters today in Nairobi, the capital.

Gunmen Attack

South Sudan’s oil-producing Upper Nile state is also facing tensions after unidentified gunmen attacked government armed forces in Nasir county, Philip Aguer, a spokesman for the national army, said by phone yesterday. He said he had no further information on the situation there.

Kiir said today he agreed to a request by the six-nation Intergovernmental Authority on Development to help mediate an end to the crisis.

“I told them that we’re ready for any dialogue, but Dr. Machar must come to the table without any preconditions,” he told lawmakers in Juba. “Through dialogue I think we can resolve this misunderstanding very quickly.”

South Sudan seceded from neighboring Sudan in July 2011 and took three-quarters of the formerly united country’s oil output. The landlocked country currently exports all its crude, about 220,000 barrels a day, through pipelines across Sudan. The East African nation relies on oil for more than 95 percent of government revenue.

Japanese Bullets

South Sudan has sub-Saharan Africa’s biggest oil reserves after Nigeria and Angola, according to BP Plc data. Its low- sulfur crude is prized by Japanese buyers as a cleaner-burning fuel for power generation. Japan will supply 10,000 bullets for United Nations peacekeeping operations in South Sudan, marking the first exemption under the Asian nation’s self-imposed curbs on arms exports, Kyodo News reported, without citing anyone.

South Sudan’s crude is pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp.

ONGC repatriated its 11 employees and the company’s joint venture has shut down oilfields in South Sudan that were producing about 40,000 barrels per day, Finance Director S.P. Garg said in a phone interview.

Chol said there is “no interruption to oil” production in the country. “Oil is still flowing,” he said.

Petroleum Minister Stephen Dhieu Dau said yesterday the evacuation of oil workers from the country is temporary and oil output from Upper Nile is flowing normally.

Thousands Displaced

The escalating crisis in South Sudan makes it “crucial that aid agencies get money needed to respond early in the year,” UN Assistant Secretary-General Toby Lanzer said on his Twitter page from Juba. He estimated the country will need $1.1 billion of humanitarian aid in 2014 after 62,000 people were displaced in the past week’s violence.

Four U.S. service members were injured on Dec. 21 while on flights to evacuate Americans from Bor, prompting President Barack Obama’s administration to urge the opposing parties to negotiate. The UN had previously sent helicopters to evacuate staff from South Sudan, and one was hit and forced to land on Dec. 20, according to the Associated Press.

Repositioning Forces

The U.S. military is repositioning forces in the Horn of Africa region to respond to any future requests from the State Department to evacuate personnel from South Sudan, Army Colonel Steve Warren, a Pentagon spokesman, said today.

Warren declined to offer details on troop numbers or whether any U.S. troops were entering South Sudan.

Three of the four U.S. troops injured earlier are stable enough to be taken to the military hospital in Landstuhl, Germany, later today, he said. The fourth will continue to receive care from U.S. forces in Nairobi, he said.

About 380 U.S. officials and private citizens have been evacuated to Nairobi and other locations, along with about 300 others, U.S. State Department spokeswoman Jen Psaki said in an e-mailed statement yesterday.

“We strongly recommend U.S. citizens in South Sudan depart immediately, and we encourage those who remain to keep in touch with the embassy,” she said in the statement.

Obama sent a letter to Congress yesterday saying he “may take further action to support the security of U.S. citizens, personnel, and property, including our embassy” in South Sudan.

--With assistance from Jonathan D. Salant and David Lerman in Washington, Rakteem Katakey in New Delhi, Marco Lui in Tokyo and Eric Ombok in Nairobi. Editors: Steven Komarow, Mark McQuillan