12 March 2013

South Sudan May Soon Resume Oil Exports Through Sudan

Photo: Joseph Kariuki/The Star
The Ngamia 1 oil rig in Turkana where Tullow Oil is prospecting for oil with initial signs of huge deposits.

Khartoum — 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.

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.

Last year the two countries signed a number of cooperation agreements that called for resolving border issues, establishing demilitarized zone, implementing four freedoms pactand resume oil production.

But Khartoum put implementation on hold and insisted that security portion is concluded before moving to effecting 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.

The loss of oil exports in the dispute over pipeline fees has left both economies in turmoil. Oil is the main source of state income for food imports.

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.

Copyright © 2013 Sudan Tribune. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.