Sudan, South Sudan seek to mend ties to keep oil flowing

By Andrew Green

JUBA (Reuters) - The presidents of Sudan and South Sudan said on Tuesday they were happy with work to rebuild southern oil exports through a Sudanese pipeline, seeking to end a recurring row that has hurt a vital source of revenues for both nations.

Within months of South Sudan's secession in mid-2011 from Sudan, Juba halted its exports that at the time had been running at 300,000 barrels per day because of a row of transit fees, border security and territory. Both economies struggled.

The taps were turned on again in April, but just three months later South Sudan had cutback output and threatened to shut it down again after Sudan accused Juba of backing rebels.

The land-locked south depends on a pipeline that runs north to a Sudanese terminal in Port Sudan.

"The two sides express satisfaction over the progress made with regard to the flow and export of oil," the two presidents, Sudan's Omar Hassan al-Bashir and South Sudan's Salva Kiir, said in a joint communique after talks in Juba.

It was only Bashir's second visit since the south seceded. It followed unrest in Sudan in September over fuel subsidy cuts, driven by a severe financial crunch since the north lost most of its oil producing areas to the south.

Output is now about 190,000 barrels per day, South Sudan's Petroleum Ministry said in October, revising down a figure of 240,000 bpd it gave in September, attributing that mistaken number to a "clerical error."

The presidents also sought to strike a unified note over the disputed territory of Abyei, a region on the border whose fate was left undecided when South Sudan declared independence.

A long-promised official plebiscite on whether it belongs to Sudan or its southern neighbor has been stalled by arguments over who is entitled to vote. Leaders of one pro-South Sudan group have threatened to hold their own referendum next week.

The joint communique said the two sides would seek to establish an administration and police force for Abyei and said "the 2 percent share of Abyei area in oil revenue, including arrears, will be paid to the Abyei administration."

Abyei was a major battleground in the north-south civil war that ran for more than two decades until a peace deal in 2005. It has emotional, symbolic and strategic significance for both.

South Sudan said this month it had made more than $1.3 billion in oil sales since the country restarted production in April this year. It also said it had paid more than $300 million to Khartoum to export the crude through Sudan's pipelines.

(Writing by Edmund Blair)

• Politics & Government
• South Sudan