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South Sudan has agreed to pay billions of dollars in offsetting the losses Sudan incurred when the Juba government shut down all oil production at the height of the dispute.
“This agreement was not only about the oil but also demilitarisation . . . We want to start from now, talking about the goodwill and to be good neighbours in approaching the issues through dialogue not war, seriously and positively, with a will to reach an agreement.”
In addition, South Sudan has agreed to pay a fee for each barrel of oil pumped to and exported from the ports of its neighbour.
Both countries have also agreed to discuss a timetable to resume oil exports.
The UN Security Council had ordered the two sides to reach an agreement by 2 August.
Thabo Mbeki, the African Union mediator who helped broker the deal, said: “The parties have agreed on all of the financial arrangements regarding oil. What will remain … is to then discuss the steps as to when the oil companies should be asked to prepare for the resumption of production and export.”
In January, South Sudan stopped oil production after both sides failed to reach an agreement on transit fees earlier this year. Oil accounts for 98 percent of South Sudan’s budget.
The dispute has crippled both the economies of Sudan and South Sudan, and fuelled a military conflict.
The deal will see South Sudan paying between $9 and $11 per barrel of oil that is piped through Sudan. South Sudan will offer to give Sudan about $3bn as compensation for lost revenues. Sudan had initially demanded $36 a barrel and later lowered their request to around $22. “The two governments need to go back to the document signed more than six months ago called the four freedoms agreement which allows citizens of the two states to move without restrictions … and implement it.”
On her first visit to South Sudan last week, Hillary Clinton, the US secretary of state, pressed South Sudan to reach a compromise.
“I would urge your government to work to reach an agreement and then to be very clear about how to use that revenue flow to benefit the people of South Sudan. We, of course, believe that an interim agreement with Sudan over oil production and transport can help address the short term needs of the people of South Sudan, while giving you the resources and the time to explore longer term options.”
Many other major differences between the two countries also remain unresolved.
Meanwhile, the US has warned that Sudan’s refusal to accept a map demarcating the border with South Sudan could lead to the resumption of “outright conflict”.’
UN Ambassador Susan Rice told reporters after a closed Security Council meeting on Thursday that the United States is “deeply concerned” about the lack of urgency from both countries in implementing an African Union roadmap aimed at averting a new war.
South Sudan won independence from Sudan last year as part of a 2005 peace treaty that ended decades of war that killed two million people.
The two countries drew close to all-out war earlier this year over the unresolved issues of oil revenues and their disputed border. — AP.
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