Sudan and South Sudan agree to extend oil agreement


By Mohammed Amin | Africa Review December 22, 2016

Sudan and South Sudan have extended the latter’s oil flow through the former’s territories for three years.

The two Sudans’ agreement, signed in September 2012, ends this month.

A statement issued by the Sudanese Oil ministry on Wednesday, said the two countries signed the extension agreement on Tuesday.

It stated that it includes technical undertakings, besides the extension.

The Sharp Decline

”The agreement has two parts, the extension of the deal and the financial transitional arrangements after the sharp decline of the international oil prices,” it pointed out.

”Sudan has accepted to reschedule the debts of South Sudan according to the transit fees agreed between the two countries in 2012,” it noted.

South Sudan will pay more than $3 billion for Sudan to absorb the economic shocks emanating from the loss of the oil revenues after the former’s independence in 2011.

The Transit Fees

Sudan has also accepted to drop part of the transit fees, should the international prices decline to under $20 per barrel.

”However, if the international prices are above $50, Juba should pay the transit fees as agreed before,” the statement said.

Sudanese President Omar al-Bashir in January ordered a review of the oil agreement with South Sudan after Juba submitted a request due to the declining international prices.

The Separation

In September 2012, the two countries agreed that South Sudan should pay around $32 per barrel, $24 for the transit fees and a compensation to Sudan.

The two countries have also signed a memorandum of understanding (MOU) to rehabilitate the South Sudan oilfields, destroyed by the civil war since December 2013.

The MOU also includes the collaboration in training and use of laboratories.

Sudan lost three quarters of its oil revenues after the separation of South Sudan in 2011.

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