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Sudan, South Sudan agree on oil deal

Al Akhbar | August 4, 2012

Sudan and South Sudan have hammered out a deal on how to share their oil wealth, one of a series of disputes that brought the rivals to the brink of all-out war earlier this year, it was announced on Saturday.

“The parties have agreed on all of the financial arrangements regarding oil, so that’s done,” African Union (AU) mediator Thabo Mbeki said early on Saturday after talks in the Ethiopian capital.

The two countries had faced an August 2 deadline set by the United Nations to resolve their differences on oil and borders, and Mbeki said they would meet next month to try to find a compromise on the disputed region of Abyei, whose status was the most sensitive issue left unresolved before South Sudan’s independence.

The former South African leader said a timetable would now be drawn up for the resumption of oil production and exports, which are vital to the economies of both deeply impoverished countries.

“What will remain, given that there is an agreement, is to then discuss the next steps as to when the oil companies should be asked to prepare for resumption of production and export,” he said.

The AU has been mediating long-running talks to try to resolve a series of disputes that have flared since South Sudan became independent in July 2011 following a 2005 peace deal that ended one of Africa’s longest civil wars.

Landlocked South Sudan took with it three-quarters of the oil held by the previously united nation, but the pipelines and processing facilities remained in Sudan.

And the two sides were unable to agree on how much Juba should pay to export its crude through a northern pipeline and port, leading the South to shut down production in January after Khartoum began seizing the oil in lieu of payment.

Oil generates about 98 percent of South Sudan’s revenue and the move crippled the economies of both countries.

Ahead of the agreement announced by Mbeki, Sudan had lowered its demand for oil fees from South Sudan. Sudan had been seeking up to $36 a barrel in fees, but in a position paper released on Thursday said it was proposing $22.20 a barrel, compared with $7.61 offered by South Sudan.

Despite the oil agreement, South Sudan’s chief negotiator Pagan Amum accused Khartoum of violating a peace plan drawn up by the African Union in April urging both sides to reach a comprehensive deal on all outstanding issues.

“The government of Sudan continues to violate the road map and continues to bomb South Sudan,” Amum told reporters.

“The (AU) peace and security council in its road map and resolution decided that they would impose sanctions on Sudan if they fail to comply, Sudan has failed to comply,” he said.

Mbeki’s announcement came hours after US Secretary of State Hillary Clinton called on the two Sudans to strike an urgent compromise on outstanding issues such as oil revenue sharing, security, citizenship and border demarcation, saying the countries “remain inextricably linked”.

Clinton’s comments came after a meeting with South Sudan’s President Salva Kiir in Juba as part of her tour of Africa.

Sudan accuses South Sudan of supporting insurgents on its territory, a charge that analysts believe despite denials by Juba, which in turn accuses Khartoum of backing rebels south of the border.

The two countries fought along their undemarcated frontier in March and April, sparking fears of wider war and leading to a UN Security Council resolution that ordered a ceasefire.

Mbeki said an agreement had also been reached between Sudan, the United Nations, the AU and the Arab League to allow for humanitarian access in the conflict-wracked Blue Nile and South Kordofan states.

Prolonged clashes between Sudanese forces and rebel groups in the two disputed territories have left thousands in a “desperate state” and in need of emergency aid, according to the United Nations.

(AFP, Al-Akhbar)

August 4, 2012 Posted by | Economics | , , , , , | Comments Off on Sudan, South Sudan agree on oil deal