Sudan and South Sudan Make Progress - New York Times

Tensions came to a head in January when South Sudan shut down oil production after failing to agree with Sudan on fees for transporting crude through Sudan’s pipeline. After declaring independence last year, South Sudan inherited most of the former country’s oil fields. But the new country is landlocked, and Sudan controls the pipeline that gets oil to market.

The impasse had a devastating effect. Without oil, South Sudan lost 98 percent of its revenue, and foreign exchange reserves plummeted. Sudan cut back on gas subsidies, sending prices for goods soaring and thousands of protesters into the streets.

In April, fighting erupted along the border, reviving fears that the two sides were again sliding toward war. Their conflict from 1983 to 2005 killed more than two million people. Some 650,000 people have been displaced in the recent fighting. It was good news that Sudan and rebels allied with the South finally signed an agreement on Sunday with the United Nations to allow aid into rebel-held areas.

Pressure from the United Nations, the African Union and Secretary of State Hillary Rodham Clinton, who visited Juba, the capital of South Sudan last week, helped push Sudan and South Sudan to reach terms on the fees.

The final details have not yet been made public, but Jeffrey Gettleman of The Times reported that South Sudan had agreed to pay Sudan about $10 per barrel, compared with $1 it offered and the $36 Sudan initially demanded. South Sudan also agreed to pay about $3 billion to Sudan in compensation for lost revenues.

There is some concern that Sudanese officials might still hold up the deal until security issues are worked out. The two countries have so far failed to delineate their common border, settle the status of the oil-rich region of Abyei, which straddles the disputed border, and resolve accusations traded by both sides that the other is supporting rebels. They are expected to resume negotiations on these issues later this month. The United Nations Security Council has threatened sanctions against both nations if insufficient progress is made.

Sooner rather than later, both sides also have to deal with even more fundamental challenges: improving governance, ending human rights violations and eradicating corruption. Sudan and South Sudan are inextricably intertwined. If the two can carry out the fee deal, they will have a better chance to resolve other critical issues.