Sudan and South Sudan agree to Extend Oil deal, Fail to Reach Compromise on Exact terms

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AFP logoSudan and South Sudan agreed Tuesday to extend an oil deal between the two countries, officials said, but they failed to settle the exact terms.

When they split in 2011 after decades of war, the two nations agreed that the South would pay a fixed fee for the use of export pipelines and facilities located in Sudan.

But a fall in global oil prices meant that the fee exceeded Juba’s earnings from oil sales, so the impoverished South lost money on every barrel sold.

The existing agreement had been due to expire in October.

The countries’ oil ministers began talks in Khartoum on Sunday as South Sudan’s new Vice President Taban Deng Gai began a two-day visit aimed at addressing issues outstanding from the 2011 split.

“Both sides broadly agreed on extending the existing oil agreement which expires before the end of this year,” a joint statement said on Tuesday.

It did not specify the duration of the extended agreement.

During the discussions held this week, South Sudan agreed to increase its oil production and revive oilfields in the country’s Unity state.

The two sides, however, failed to decide on the financial terms of the deal, an official close to the negotiations told AFP, adding that they were expected to meet again within a month to work out those details.

South Sudan is estimated to produce around 150,000 barrels of oil a day down from 350,000 at independence in 2011.

Many oil fields ceased operating after the South plunged into civil war less than two years after its secession, with tens of thousands killed and more than 2.3 million driven from their homes.

AFP