Sudan, S.Sudan agree on meeting to avoid disputes

Sudan and South Sudan, fleshing out the details of their new peace deals, have agreed to cooperate on banking and monetary policy

Sudan, S.Sudan agree on meeting to avoid disputes

World Bulletin/News Desk 

Sudan and South Sudan plan to avoid future disputes over oil exports with a metering system, but have failed to end a $1.8 billion row over how much Juba will pay for seizing northern oil facilities after its secession.

On Thursday, the African neighbours signed a deal to restart oil exports from the landlocked South through a Sudanese Red Sea port. In January, Juba had shut down its entire output of 350,000 barrels a day after failing to agree on export fees.

When the row escalated, Juba had accused Sudan and the mainly Chinese oil firms operating in the new republic of publishing incorrect production data to the disadvantage of the South.

Oil facilities in both countries were built before South Sudan became independent from Khartoum in July 2011, putting three quarters of oil production in the south but locating processing, refining and sea export facilities in the north.

To avoid any future arguments over export volumes, both sides plan to "review and ensure...effective metering facilities", according to the final agreement published by the African Union (AU) late on Thursday.

The agreement did not outline any concrete steps but said each party had the right to ask oil firms to install additional metering systems.

The neighbours also agreed to set up a committee headed by an African Union-appointed official to review payments and technical issues to avoid disputes.

Global Witness, a group campaigning for transparency, said it was disappointing that oil payments and audit reports would not be made public.

"This lack of public accountability is particularly concerning given the allegations of high-level corruption that both governments are facing," Global Witness campaigner Dana Wilkins said in a statement.

Diplomats had hoped the agreement would settle all disputes but both nations failed to agree on how much South Sudan should pay Sudan in compensation for taking over oil facilities once owned by state firm Sudapet.

Sudan demands $1.8 billion for Sudapet's assets, said Pagan Amum, Juba's chief negotiator.

"We are not going to pay this," he said after the signing ceremony in Ethiopia on Thursday.

The agreement, which was brokered after three weeks of talks in Addis Ababa, only said the parties would try reach a deal within two months. Lengthy international arbitration would then probably follow.

Both sides also agreed that Sudan will have to pay back proceeds from two disputed oil shipments, transported by the Ratna Shradha and ETC ISIS vessels, which Sudan seized as compensation for what it called unpaid transit fees.

Southern officials had previously demanded the return of four oil shipments worth more than 6 million barrels, seized since December by Sudan, which has never confirmed or denied the figures.

Juba will give up claims from southern oil diverted to refineries by Sudan when the row over transit fees escalated. "The Government of South Sudan shall not bring any other claims," the agreement said.

Under the final deal, South Sudan will pay between $9.10 and $11 a barrel to export its crude through the north. Juba will also pay $3.08 billion to help Sudan overcome the loss of three quarters of oil production due to southern secession.

South Sudan's government expects resuming oil production will take three to six months after the pipelines were watered and some fields were damaged during fighting between the two nations in April.

South Sudan plans to build pipeline to Kenya but analysts are sceptical as it would be difficult to build across rough terrain hit by tribal violence.

Deals include banking, monetary accord

Bank transfers were impossible to make in local currencies, because both governments did not recognise one another's currencies. Cross-border travellers had to change money first into dollars, often at a hefty premium on the black market.

The two countries now plan to set up a joint central bank committee to allow bank transfers and foster trade between them, according to an agreement published by the African Union late on Thursday.

Any commercial bank operating in one country will be granted a license as a foreign bank on the other side of the border, it said.

Both central banks will also cooperate on monetary policy and exchange rates to control inflation, one of the biggest economic challenges to both countries.

The neighbours will also coordinate banking supervision.

"The ... (committee) shall have the principal purpose of supporting financial stability and sound banking policies in the two states in order to enhance cooperation and promote trade and the economic viability of the two states," the agreement said.

So far just one large bank operates in both countries. Bank of Khartoum, a unit of Dubai Islamic Bank, has been expanding in the South but has unveiled plans to change its name. Many people in the South feel strongly about Sudan after decades of conflict.

Despite the agreements signed after three weeks of talks in Ethiopia, many issues remain unresolved, including marking the border and settling the fate of disputed border areas.

Güncelleme Tarihi: 29 Eylül 2012, 13:00
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