News Analysis: Battles at S. Sudan's oil fields threaten to cause harm on economics of Sudan, S. Sudan

The violent clashes in South Sudan's oil-rich Unity and Upper Nile states threaten to lead to halt of oil production which would inflict great harm on both Sudan and South Sudan, which depend mainly on oil revenues.

South Sudan rebels, led by former Vice President Riek Machar, are seeking to control the areas of oilfields to prevent the government of President Salva Kiir Mayardit from using the oil revenues to prolong the war, said the rebels spokesman, Manawa Peter, in a statement on Wednesday.

During the battles, which have been waging since the beginning of current May, the rebels said they have captured a number of oil facilities, including Madriel oilfield, some 20 km from Paloch, the biggest oilfield in Upper Nile state, which threatens to completely halt the oil production there.

However, South Sudanese Information Minister Michael Makuei, speaking to Xinhua Wednesday, denied the rebels' claim of seizing oil facilities, describing it as "false allegations."

For their part, observers believed that if the oil production ceased due to the battles, the economies of the two Sudanese states, which depend basically on the oil revenues and are already suffering from severe lack of resources, would greatly be harmed.

"It is apparent that the rebels are seeking to halt the oil production, and if they succeeded, it would be a hard blow to the South Sudanese government," Jackson Salamy, a South Sudanese political analyst, told Xinhua on Thursday.

"The South Sudanese government depends on oil revenues to steer its matters under a deteriorating economic situation because of the war. In case it lost the oil, it would face real problems related to deficiency or complete lack of resources," he noted.

"The rebels, via their series of statements about controlling oil facilities, tend to send intimidating messages to the oil companies to force them cease their activities and leave," Salamy said.

"In contrast, Juba rushes to deny the rebels' claims and reiterate its control over the oil areas to reassure the companies and encourage them to continue their work," he noted, adding that "this is another battle within the ongoing conflict between the two sides in the south."

In the meantime, the harm which could be caused by the halt of the oil production is not confined to South Sudan alone but extends to cover Sudan, which also relays on the revenues of the oil exported through its pipeline.

Abdullatif Abdul-Rahman, a Sudanese political analyst, told Xinhua that "the current security events in the South and the eruption of clashes at the oil areas in Unity and Upper Nile states negatively affect Sudan."

"The drop in the amount of the oil exported via Sudan's harbor would lead to a decrease in Sudan's revenues from the transit fees, upon which it relays to fill in the revenues gap caused by South Sudan cessation," Abdul-Rahman said. "It directly affects Sudan's general budget."

South Sudan's oil production has dropped by nearly 30 percent since mid-December last year, where the country's daily oil production used to reach 245,000 barrels before the fighting broke out, but now that figure has been slashed to 175,000 barrels.

South Sudan, which became independent in 2011, plunged into violence in December 2013, when fighting erupted between troops loyal to President Salva Kiir and defectors headed by his former deputy Riek Machar.

The conflict soon turned into an all-out war, with violence taking on an ethnic dimension that pitted the president's Dinka tribe against Machar's Nuer ethnic group.

The clashes have left thousands of South Sudanese dead and forced around 1.9 million people to flee their homes. Endit