Sudan and South Sudan agree oil exporting deal
The delegations of Sudan and South Sudan in the Ethiopian capital agreed on Tuesday to allow for the resumption of oil exports that were suspended last year for disagreement on the transit fees that should be assessed.
Sudan's Idris Mohamed Abdel Gader (L), Thabo Mbeki (C) and South Sudan's Pagan Amum (R) holding the signed implementation matrix on the Cooperation Agrements (AUHIP photo) Landlocked South Sudan inherited most of the 350,000 barrel-per-day oil reserves that existed under the once united country but can only export it using the pipelines that run all the way to the terminals on the Red Sea.
Under the terms of the implementation matrix distributed by the African Union High Level Implementation Panel (AUHIP), the governments of the two countries are to instruct oil companies within 14 days to re-establish production, processing and transportation.
The two parties also agreed that a review of the existing metering system shall take place prior to resumption of production, with each party conducting the review respectively within its territory as stipulated in the signed agreement. Last year, the two countries signed a number of cooperation agreements that called for resolving border issues, establishing a demilitarized zone, implementing the Four Freedoms pact and resuming oil production. But Khartoum put implementation on hold and insisted that a security portion be concluded before moving to affecting other items.
Last Friday, two sides signed a deal in the Ethiopian capital outlining on steps to implement the demilitarized zone (DMZ), removing a major obstacle in the way of other issues. Oil is the main source of state income for food imports and the loss of oil exports following a dispute over pipeline fees has left both economies in turmoil.
It remains to be seen how long it will take oil companies to prepare the pipelines for the flow of oil, a process which could take several months.