Sudan, S.Sudan reach oil deal, will hold border talks
Sat Aug 4, 2012 4:26pm GMT
* Two sides still have to agree where border lies
* Each side accuses other of backing rebel groups
* Juba gives details of oil agreement
By Aaron Maasho
ADDIS ABABA, Aug 4 (Reuters) - Sudan said on Saturday it had reached a deal
with South Sudan on oil transit fees, a first step towards ending a dispute
which had brought the hostile neighbours close to war, but also said it
wanted a border security agreement before oil flows resumed.
The shareout of oil revenues was one of the biggest issues left unresolved
when South Sudan became independent in July last year, under a 2005
agreement that ended decades of civil war, and fighting along the
ill-defined border pushed them close to war in April.
U.S. Secretary of State Hillary Clinton said the oil agreement showed a "new
spirit of compromise on both sides," and U.S. President Barack Obama said
Sudan and South Sudan should build on the momentum to resolve their
remaining border and security issues.
"This agreement opens the door to a future of greater prosperity for the
people of both countries," he said in a statement released by the White
House.
The two sides, deeply mistrustful of each other, have often not implemented
previous agreements and still need to mark their 1,800-km (1,200-mile)
border and resolve charges both have made of supporting rebels in the
other's territory.
The U.N. Security Council had given the two states until Thursday to resolve
all conflicts left over from South Sudan's secession, taking with it the
bulk of former Sudan's oil reserves.
Landlocked South Sudan threw both economies into turmoil when it shut down
its output of 350,000 barrels a day in January after Sudan started seizing
oil going through its pipelines to make up for what it called unpaid transit
fees.
African Union mediator Thabo Mbeki said the neighbours would now start talks
to get southern oil exports moving.
"It's an (oil) agreement about all of the matters. The issues that were
outstanding were charges for transportation, for processing, transit,"
Mbeki, the former South African president, told reporters.
"Steps will be taken to get companies to begin the process of resuming oil
exports from South Sudan," he said.
Mbeki gave no financial details of the deal, but South Sudan's delegation
said Juba would pay a weighted average of under $10 per barrel. It has also
offered a $3.2 billion package to compensate Sudan for the loss of most of
its oil reserves to the South. It had previously offered $2.6 billion.
Sudan itself lowered its transit fee demand to around $22 a barrel, from an
initial $36, according to a position paper published by SUNA. It also wants
compensation of $3.02 billion, among other demands, Suna added.
"The parties understand very well that it would be important that by the
time this oil starts flowing again, the necessary security arrangements
should be in place," Mbeki said.
Sudan said the oil deal would be implemented only after a security
arrangement had been reached, after the Muslim fasting month of Ramadan
ended at the end of August, the state news agency SUNA reported.
"Both sided reached understandings regarding oil which are considered
acceptable..." Sudanese delegation spokesman Mutrif Siddig told SUNA. "Its
implementation will start after understandings on security issues," he said.
Oil industry sources have said restarting oil production could take six
months or longer as the pipelines have been filled with water to avoid
gelling and some wells were not closed properly.
BORDERS, ABYEI
The African Union-mediated talks, led by Mbeki, have long been hampered by
differences on where to draw a demilitarised buffer zone, seen as a crucial
first step to ending hostilities.
The South's top negotiator, Pagan Amum, reiterated calls for an arbitration
body to resolve a dispute over the position of their shared border, a
potentially lengthy process.
He also accused Khartoum of maintaining a police force in the disputed Abyei
border region, despite U.N. requests for a complete pullout by both sides.
Mbeki said Sudanese President Omar Hassan al-Bashir and his southern
counterpart Salva Kiir were due to discuss Abyei next month, after a break
for Ramadan.
"We have informed them (AU) that there has been an agreement between the
parties that the matter of the final status of Abyei will be addressed at
the next summit meeting of the presidents (Bashir and Kiir)," he said.
Abyei was meant to have a referendum like the South under the 2005 peace
agreement, but the two sides have been unable to agree on who should
participate.
