Bloomberg News

Sudan, South Sudan Leaders Bid to End Impasse on Oil and Borders

January 04, 2013

Sudanese President Umar al-Bashir and South Sudan’s Salva Kiir are scheduled to meet in the Ethiopian capital in a bid to reach an agreement over border security and resume oil flows vital to both countries’ economies.

Nkosazana Dlamini-Zuma, the chairwoman of the African Union Commission, said in a statement she hoped the talks today in Addis Ababa “will enable the two presidents to agree on the best means and ways of overcoming the challenges encountered” in implementing accords reached at a September summit.

Since that meeting, the two countries have failed to establish a demilitarized buffer zone along their border and restore oil shipments from South Sudan through Sudan’s Red Sea export terminal. Both Juba and Khartoum retain troops within 10 kilometres (6 miles) of the border and accuse each other of backing rebels on their territory.

South Sudan, which gained independence in July 2011, shut down its 350,000 barrels a day in crude production last January after accusing the authorities in Khartoum of stealing $815 million of its oil, which Sudan said it took to recover unpaid transportation and processing fees. That and other disputes, including over border security, brought the countries to the brink of war in April.

The oil is pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s ONGC Videsh Ltd.

U.S. Secretary of State Hillary Clinton, Norwegian Foreign Minister Espen Barth Eide and U.K. Foreign Secretary William Hague yesterday urged the two sides to “seize the opportunity” and “immediately withdraw” armed forces from the demilitarized zone.

Oil Production

“The restart of oil production and export will be particularly valuable for both economies and should not be held up by negotiation on other issues,” they said in a joint statement.

Sudan’s government has refused to allow South Sudan to resume oil shipments through its territory as agreed in September, accusing the authorities in Juba of continuing to support rebels in Southern Kordofan and Blue Nile states.

The two countries also face a stalemate over the disputed border region of Abyei. The area is contested by the Ngok Dinka people, who are settled in the area and consider themselves southerners, and Misseriya nomads, who herd their cattle into the area in the dry season and are supported by Khartoum.

The African Union’s Peace and Security Council gave the two countries six weeks from Oct. 24 to consent to its mediator’s proposal for a deal on Abyei. The proposal was accepted by South Sudan and rejected by Sudan.

To contact the reporter on this story: Michael Gunn in Cairo at mgunn14@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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