Wednesday, March 13, 2013

Sudans agree to restart oil flow after border deal

By Aaron Maasho and Hereward Holland

ADDIS ABABA/JUBA (Reuters) - South Sudan said on Tuesday it would be ready to restart oil production within three weeks after finalising a deal to resolve bitter border and security disputes with its neighbour and long-time foe Sudan.

South Sudan negotiator Pagan Amum is pictured on the sidelines of a leader's summit in the Ethiopian capital Addis Ababa January 4, 2013. REUTERS/Tiksa Negeri

Hours after the announcement, Sudan said it had begun pulling its troops out of a buffer zone along the countries' shared boundary, easing tensions and echoing South Sudan's announcement of a troop withdrawal on Monday.

Landlocked South Sudan shut down its 350,000 barrel-per-day crude output in January last year in a row with Sudan over how much it should pay to send the oil through Sudanese pipelines to the Red Sea.

The closure had a devastating effect on both struggling economies, which rely on foreign currency from oil sales and pipeline fees to import food and fuel.

It also exacerbated explosive quarrels over disputed territory and other issues left unresolved between the two countries after South Sudan's secession from Sudan in July 2011.

Border skirmishes brought the two close to war in April and each accuses the other of backing rebels in their territories.

Sudan's chief negotiator, Idris Mohammed Abdel Gadir, signed a deal with South Sudanese counterpart Pagan Amum early on Tuesday setting out a timeline to restart exports after four days of African Union-brokered talks in Addis Ababa.

Former South African president Thabo Mbeki, who has been mediating between the two sides, told reporters they had agreed to order oil companies to restart production within two weeks of "D-Day", given as Sunday, March 10.

A copy of the implementation timeline seen by Reuters confirmed the date. "Resumption of production shall take place as soon as technically feasible," it said.

The oil deal capped months of on-off negotiations. Both countries had already agreed to pull troops from the border and to restart oil flows in principle in recent months.

But differences over how to put the agreements into practice had stymied efforts to get a concrete settlement.

Tuesday's oil deal, and other security pacts agreed on Friday, were backed up by concrete timetables, said diplomats following the discussions, though they warned there was still a chance things could break down.

OIL FLOWS

Speaking to reporters after returning from Addis Ababa, South Sudan's Petroleum and Mining Minister Stephen Dhieu Dau said there were few technical barriers to resuming oil output.

"We assume that we will resume as soon as possible," he said, adding it would take three weeks at most to resume output and no more than a further week for it to reach the export terminal in Port Sudan.

According to a technical assessment of the oil facilities, South Sudan will start oil production at 80 percent of pre-shutdown levels, Dau said.

In Khartoum, Awad Abdelfatah, undersecretary at Sudan's oil ministry, told Reuters orders had been given to oil firms to prepare to receive southern oil. He said he expected flows would not be less than 160,000 barrels a day at first.

The timetable seen by Reuters said redeployment of forces from the border zone should be complete by April 5.

However, it did not set a date for determining the final status of Abyei, a disputed territory that has triggered fighting in the past. An administration and council for the area would be set up by March 17, it said.

Interior ministers from both countries also planned to meet on March 17 to discuss how to open up border crossings, Sudan's state news agency SUNA reported.

Sudan's President Omar Hassan al-Bashir called his South Sudanese counterpart Salva Kiir to invite him to Khartoum, Sudanese presidential secretary Emad Sayed Ahmed told Reuters.

Samson Wassara, a professor of political science at Juba University, said the agreement seemed to be the result of increasing strain on both sides since the shutdown.

"This time, I think the parties are agreeing under diplomatic pressure, but also under economic pressure and local political pressure," he said.

Around 2 million died in the decades-long civil war between Khartoum and Sudan's south, which ended in a 2005 peace deal - a settlement that paved the way for the South's secession.

(Writing by Alexander Dziadosz in Cairo; Additional reporting by Khalid Abdelaziz in Khartoum; Editing by Andrew Heavens)

News

Wednesday, March 13, 2013

Sudans agree to restart oil flow after border deal

By Aaron Maasho and Hereward Holland