Sudan and South Sudan reach agreement over oil after tense eight-month dispute - Telegraph.co.uk

"I welcome the agreement between Sudan and South Sudan on financial arrangements for the export of oil from South Sudan," he said. "This breakthrough will be an important boost to the economies of both countries, and I commend the spirit of compromise both governments have shown.

"While I am also encouraged by progress in agreeing humanitarian access to those affected by conflict in Southern Kordofan and Blue Nile, it is disappointing that Sudan and South Sudan were unable to reach a comprehensive agreement by the UN Security Council deadline of 2 August. The African Union talks have been led tirelessly by former Presidents Mbeki, Buyoya and Abubakar, and I assure them of the UK's continued support in their mediation.

"I now call on the two governments to redouble their efforts to resolve all remaining areas of difference at the forthcoming Presidential summit, so the people of Sudan and South Sudan can enjoy the benefits of peaceful cooperation in the future."

The AU has been mediating long-running talks to try to resolve a series of disputes that have flared since South Sudan became independent in July 2011 following a 2005 peace deal that ended one of Africa's longest civil wars.

Landlocked South Sudan took with it three-quarters of the oil held by the previously united nation, but the pipelines and processing facilities remained in Sudan.

And the two sides were unable to agree on how much Juba should pay to export its crude through a northern pipeline and port, leading the South to shut down production in January after Khartoum began seizing the oil in lieu of payment.

Oil generates about 98 per cent of South Sudan's revenue and the move crippled the economies of both countries.

Despite the oil agreement, South Sudan's chief negotiator Pagan Amum accused Khartoum of violating a peace plan drawn up by the African Union in April urging both sides to reach a comprehensive deal on all outstanding issues.

"The government of Sudan continues to violate the road map and continues to bomb South Sudan," Mr Amum said.

"The (AU) peace and security council in its road map and resolution decided that they would impose sanctions on Sudan if they fail to comply, Sudan has failed to comply," he said.

Mr Mbeki's announcement came hours after US Secretary of State Hillary Clinton called on the two Sudans to strike an urgent compromise, saying they "remain inextricably linked".

"It is urgent that both sides, north and south, follow through and reach timely agreements on all outstanding issues, including oil revenue sharing, security, citizenship and border demarcation," Mrs Clinton said after meeting South Sudan's President Salva Kiir in Juba.

Mrs Clinton, on a tour of Africa, spent around three hours on Friday in the steamy heat of Juba – a rapidly growing city largely made up of simple tin-roof huts strung out alongside the White Nile river.

"There must always come a point where we look forward and recognise the need to stop fighting over past wrongs so we can build toward a new future," she said.

"It's time to dig wells instead of graves," she added, quoting a South Sudanese bishop. "Time to reach an agreement that allows both countries to prosper."

Mr Mbeki said Sudan's President Omar al-Bashir and Kiir would meet next month to find an agreement on Abyei, whose status was the most sensitive issue left unresolved before South Sudan's independence

Prolonged clashes between Sudanese forces and rebel groups in the two disputed territories have left thousands in a "desperate state" and in need of emergency aid, according to the United Nations.