Sudan, S.Sudan agree on metering to avoid disputes
Fri Sep 28, 2012 4:24pm GMT
By Ulf Laessing
ADDIS ABABA, Sept 28 (Reuters) - Sudan and South Sudan plan to avoid future
disputes over oil exports with a metering system, but have failed to end a
$1.8 billion row over how much Juba will pay for seizing northern oil
facilities after its secession.
On Thursday, the African neighbours signed a deal to restart oil exports
from the landlocked South through a Sudanese Red Sea port. In January, Juba
had shut down its entire output of 350,000 barrels a day after failing to
agree on export fees.
When the row escalated, Juba had accused Sudan and the mainly Chinese oil
firms operating in the new republic of publishing incorrect production data
to the disadvantage of the South.
Oil facilities in both countries were built before South Sudan became
independent from Khartoum in July 2011, putting three quarters of oil
production in the south but locating processing, refining and sea export
facilities in the north.
To avoid any future arguments over export volumes, both sides plan to
"review and ensure...effective metering facilities", according to the final
agreement published by the African Union (AU) late on Thursday.
The agreement did not outline any concrete steps but said each party had the
right to ask oil firms to install additional metering systems.
The neighbours also agreed to set up a committee headed by an African
Union-appointed official to review payments and technical issues to avoid
disputes.
Global Witness, a group campaigning for transparency, said it was
disappointing that oil payments and audit reports would not be made public.
"This lack of public accountability is particularly concerning given the
allegations of high-level corruption that both governments are facing,"
Global Witness campaigner Dana Wilkins said in a statement.
COMPENSATION ROW
Diplomats had hoped the agreement would settle all disputes but both nations
failed to agree on how much South Sudan should pay Sudan in compensation for
taking over oil facilities once owned by state firm Sudapet.
Sudan demands $1.8 billion for Sudapet's assets, said Pagan Amum, Juba's
chief negotiator.
"We are not going to pay this," he said after the signing ceremony in
Ethiopia on Thursday.
The agreement, which was brokered after three weeks of talks in Addis Ababa,
only said the parties would try reach a deal within two months. Lengthy
international arbitration would then probably follow.
Both sides also agreed that Sudan will have to pay back proceeds from two
disputed oil shipments, transported by the Ratna Shradha and ETC ISIS
vessels, which Sudan seized as compensation for what it called unpaid
transit fees.
Southern officials had previously demanded the return of four oil shipments
worth more than 6 million barrels, seized since December by Sudan, which has
never confirmed or denied the figures.
Juba will give up claims from southern oil diverted to refineries by Sudan
when the row over transit fees escalated. "The Government of South Sudan
shall not bring any other claims," the agreement said.
Under the final deal, South Sudan will pay between $9.10 and $11 a barrel to
export its crude through the north. Juba will also pay $3.08 billion to help
Sudan overcome the loss of three quarters of oil production due to southern
secession.
South Sudan's government expects resuming oil production will take three to
six months after the pipelines were watered and some fields were damaged
during fighting between the two nations in April.
South Sudan plans to build pipeline to Kenya but analysts are sceptical as
it would be difficult to build across rough terrain hit by tribal violence.
(Reporting by Ulf Laessing; Editing by Alison Birrane and Jason Neely)
Sudan, S.Sudan peace deals include banking, monetary accord
Fri Sep 28, 2012 4:34pm GMT
By Ulf Laessing
ADDIS ABABA, Sept 28 (Reuters) - Sudan and South Sudan, fleshing out the
details of their new peace deals, have agreed to cooperate on banking and
monetary policy, which could help boost trade after decades of civil war.
The two countries, which came close to war in April, agreed on Thursday to
improve border security and foster trade, crucially to restart oil exports
from the South through northern pipelines.
The border had been closed since South Sudan's messy secession in July 2011,
and there has been almost no bilateral trade between the two neighbours.
Bank transfers were impossible to make in local currencies, because both
governments did not recognise one another's currencies. Cross-border
travellers had to change money first into dollars, often at a hefty premium
on the black market.
The two countries now plan to set up a joint central bank committee to allow
bank transfers and foster trade between them, according to an agreement
published by the African Union late on Thursday.
Any commercial bank operating in one country will be granted a license as a
foreign bank on the other side of the border, it said.
Both central banks will also cooperate on monetary policy and exchange rates
to control inflation, one of the biggest economic challenges to both
countries.
The neighbours will also coordinate banking supervision.
"The ... (committee) shall have the principal purpose of supporting
financial stability and sound banking policies in the two states in order to
enhance cooperation and promote trade and the economic viability of the two
states," the agreement said.
So far just one large bank operates in both countries. Bank of Khartoum, a
unit of Dubai Islamic Bank, has been expanding in the South but has unveiled
plans to change its name. Many people in the South feel strongly about Sudan
after decades of conflict.
Despite the agreements signed after three weeks of talks in Ethiopia, many
issues remain unresolved, including marking the border and settling the fate
of disputed border areas. (Reporting by Ulf Laessing; editing by Jane Baird)
C Thomson Reuters 2012 All rights reserved
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Received on Fri Sep 28 2012 - 18:52:40 EDT
