US restricts trade with South Sudanese oil firms

A view of an oil facility in the South Sudanese town of Paloch, on March 2, 2014 -- the US has imposed restrictions on exports of US technical support to the South Sudanese oil industry (AFP Photo/ANDREI PUNGOVSCHI)
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Dave Clark
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Washington (AFP) - The United States imposed restrictions Wednesday on exports of US technical support to the South Sudanese oil industry, warning that it is fuelling the bloody civil war there.

State Department spokeswoman Heather Nauert said exporters will henceforth need a license to export, re-export or transfer US technology or equipment to 15 "South Sudanese oil-related entities."

The names of the companies will be added to a US Commerce Department list on Thursday, but South Sudan's oil is largely exploited though joint ventures between state-owned Nilepet and Chinese, Indian and Malaysian firms.

A non-governmental watchdog, The Sentry, said that any oil firms on the list using US-made equipment would now find it hard to order spare parts, hampering their operations.

"The listed entities are a source of substantial revenue for the government of South Sudan," Nauert said in a statement.

"Unfortunately, the South Sudanese government, and corrupt official actors, use this revenue to purchase weapons and fund irregular militias that undermine the peace, security, and stability of South Sudan rather than support the welfare and current emergency food needs of the South Sudanese people," she alleged.

"We call on the region and broader international community to join us in limiting the financial flows that fuel the continuing violence in the country."

South Sudan became the world's newest nation in July 2011 after many years of independence struggle against the Khartoum government of Sudan, but soon fell into infighting of its own.

Now, after more than four years of civil war, the government is broke and hyperinflation -- which peaked at around 500 percent in 2016, decelerating to 155 percent in 2017 -- has sent prices soaring.

Oil production has dropped to about 120,000 barrels a day, from a peak of 350,000 barrels before independence, according to the World Bank.

Last month, United Nations agencies in South Sudan warned that 5.3 million people -- about half of the population -- were in dire need of food aid.

Last month, an investigation by The Sentry showed how members of South Sudan's elite were using funds from state-owned Nilepet to "fund militias responsible for horrific acts of violence" and to enrich themselves.

"Today's announcement by the Commerce Department is only the latest action taken by the United States, European Union, Canada, and Australia to hold the Government of South Sudan accountable for its violent kleptocracy," said Joshua White, the group's policy director.

The group said more than $80 million was paid to politicians, military officials, and companies owned by politicians and members of their families, for services such as military logistics to forces implicated in atrocities.