Clik here to view.
Commodities trader has bought containers of crude Sudan seized from its southern neighbour, industry insiders say
The Swiss-based commodities trader Trafigura has bought oil the South Sudanese government claims was seized by Sudan, its northern neighbour and former civil war enemy, according to industry sources.
Trafigura is now in a legal dispute over ownership, the sources told Reuters.
The tanker of crude oil is one of three seized cargoes, forming part of some $815m (£512m) in oil revenues, which South Sudan's president, Salva Kiir, accused Sudan of "looting"; the Sudanese government, in Khartoum, said the cargoes provided compensation for unpaid transit fees.
Landlocked South Sudan must pump its oil to the Red Sea via a pipeline across Sudan, to Port Sudan, to earn oil revenues, which account for 98% of the seven-month-old country's income.
Last month, South Sudan shut down its production of 350,000 barrels a day in an escalating row over the three cargoes. Sudan's president, Omar Hassan al-Bashir, said in an interview on Friday tensions with South Sudan over oil transit payments could lead to war between the two countries.
Trafigura, the world's third-largest oil trader, bought one cargo of the Nile Blend grade crude, loaded aboard the Indian-flagged Ratna Shradha, according to industry sources familiar with the transaction. The fate of the other two cargoes is unclear.
In response to a request for information about Trafigura's involvement with this shipment, the firm said in an emailed statement last week: "Like many oil companies, we have bought from time to time both Nile Blend and Dar Blend crude oil. In relation to our interests in recent shipments, given the ongoing political discussions with respect to Sudanese oil ownership, significant efforts have been made to confirm legal title, and that confirmation has been provided.
"The government of Southern Sudan were asked to provide further information to support their claim to ownership of the oil in which Trafigura has an interest. Some information has been provided, which we are reviewing."
The Trafigura shipment loaded days before the South Sudanese justice ministry published a list of three vessels – Ratna Shradha, Sea Sky and Al Nouf – it said had been forced to load southern oil on orders from Khartoum.
Earlier, on 14 January, it stated that Sudan had loaded oil of Southern Sudanese origin on to the Sea Sky. Sudan confirmed a day before that it was holding two other ships with southern oil over unpaid fees. It did not say whether it intended to sell the oil; nor did it state the volumes, saying only that the oil would be used in its two refineries.
The oil and metals trading giant Trafigura, whose chairman, Claude Dauphin, was a protegé of the veteran oil trader Marc Rich, is well known in commodity circles. The company has drawn international scrutiny twice in recent years: for oil trade with Iraq under the United Nations' oil-for-food programme, and in connection with the dumping of toxic oil waste in the Ivory Coast.
A Trafigura-chartered tanker was intercepted in the Caribbean in 2001 on suspicion of carrying illegal Iraqi crude. In a settlement, Trafigura agreed to pay a $20m penalty, but was not charged with smuggling and denied wrongdoing.
More recently, toxic waste from a tanker it chartered in 2006 was dumped in Ivory Coast. The government of Ivory Coast alleged that 16 people had died and thousands were made ill. Trafigura paid a $200m settlement, and the country's prosecutor declared there was no evidence of any illegality by Trafigura.
Trafigura declined to comment further when asked if the company had any concerns about the origins of the disputed Sudanese oil shipment before the decision to buy or load it.
Reuters said it had no independent confirmation to support South Sudan's claim that its oil was stolen. However, it is exceptional for Sudan to market its 115,000 barrels a day of production as this is normally processed in domestic refineries. Sudan has not sold any other oil since July, when South Sudan was established.
The Ratna Shradha was last seen on 5 February, near Singapore, and listed its destination as the Malaysian port of Tanjung Pelepas, according to ship tracking data.
South Sudan's oil is typically sent east to Asian refineries.
South Sudan's justice ministry in the capital, Juba, has warned that any party purchasing these three cargoes or selling to another party may be liable to litigation.
The Ratna Shradha is owned by a Calcutta-based company called India Steamship. An official at the company, who did not wish to be identified, confirmed that Trafigura had loaded the crude oil on to the Ratna Shradha. He said he was not aware of any legal complications arising from the transaction.
The price of the oil sold to Trafigura is not known. But traders in the Middle East and Asia said the disputed cargoes were offered from Port Sudan at discounts to official prices charged by South Sudan.
"We never comment about transactions in which we have an interest, other than to say that the pricing of any commodity deal is always determined by many factors including, for example, storage capacity onshore and availability of shipping capacity," Trafigura said in a statement.
At current international oil prices, the 600,000-barrel load is worth around $70m.
Trafigura is not the only company that has been involved with the disputed oil shipments.
The Middle East-based trader FAL Oil is managing the two other oil tankers South Sudan claims were illegally seized and sold by Khartoum on the international oil market, the industry sources said.
The sources said the other disputed shipments aboard the Al Nouf and the Sea Sky that loaded Dar Blend oil in mid-January had not yet found final buyers. Tracking data showed that one of the tankers, the Sea Sky, was anchored off the shore of Sudan on 5 February while the Al Nouf has not sent a satellite signal in recent weeks.
FAL Oil's general manager, Mohamed Osman, said last week: "We are managing the ships, but we are not the charterers. The cargo is not ours, but we can't disclose the charterer. At the moment, we don't know what the charterer would like to do."
The company has been one of the largest independent oil and bunker traders in the Gulf, although it has scaled back trading operations in the past 18 months because of credit issues.