Trafigura accused of trading in 'illegal oil'

Trafigura sailed back into controversy yesterday amid accusations that the commodities trading giant was dealing in illegal oil cargo.

The company, best known for seeking to kill a story about its illegal dumping of hazardous waste by gagging the press with a super-injunction, is now in the thick of a hydrocarbon dispute between the governments of Sudan and the recently-created South Sudan.

According to a Reuters' investigation, Trafigura has bought a tanker of crude oil worth hundreds of millions of dollars which the South Sudanese government claims was illegally seized by Sudan, its northern neighbour and former civil war foe. Sudan has denied the allegations, arguing that it does have the cargoes, but that they were taken to satisfy unpaid oil transit fees.

Landlocked South Sudan must pump the oil exports that make up 98 per cent of the seven-month old country's income to the Red Sea through a pipeline across Sudan to Port Sudan.

Trafigura is reported to have bought the Nile Blend crude oil contents of the Ratna Shradha tanker, one of three cargoes which South Sudan's President Omar Hassan al-Bashir accused Sudan of "looting".

The Indian-flagged tanker was last sighted near Singapore and is thought to be on route to the Malaysian port of Tanjung Pelepas. It is not known what happened to the other two oil cargoes.

Trafigura declined to comment beyond a prepared statement, which appeared to confirm that it was in possession of the disputed cargo, but argued that the acquisition was above board.

South Sudan's justice ministry has warned that any party purchasing the three seized cargoes or selling to a third party may be liable to litigation.

A lawyer specialising in energy sanctions confirmed that third parties dealing in the oil could be sued by Southern Sudan and a contract to buy the oil might not serve as a defence in court.

Tensions between the neighbours are now so high that Sudan's President Omar Hassan al-Bashir said last week that the dispute over oil transit payments could reignite the war.