Sudan, South Sudan to take steps to lower oil tension

Reuters News

6/16/2013 2:27:47 PM - Reuters News

CAIRO (Reuters) - Sudan and South Sudan are prepared to take steps, brokered by the African Union, to try to avert an oil crisis between them amid accusations from both sides that the other is supporting insurgencies in their territories.

Sudan officially informed South Sudan on Tuesday that it would stop allowing its neighbor to export crude through its territory within two months unless Juba gave up support for insurgents operating across their shared border.

In turn, Juba accuses Khartoum of backing rebels on its territory, one of several conflicts stemming from the messy split in 2011 of what was once Africa's largest country. Both sides deny supporting the rebels.

The oil stoppage would cut off the crude and transit fees that make up both countries' main source of foreign income.

The dispute over rebel support has been rumbling for months, but the latest threat effectively tears up an agreement brokered by the African Union in March over transit fees that had shut the pipelines for 16 months.

The African Union suggested a continuation of a demilitarized zone between two countries and setting up a mechanism to examine accusations of support for the insurgencies by both parties, Abubakar El-Saddiq, a spokesman for Sudan's Foreign Ministry, said.

"Sudan has officially informed the esteemed committee for the African Union ... about its acceptance of the committee's suggestions in order to avoid an oil crisis between both countries," Saddiq said.

Part of the original AU-mediated agreement was to set up a buffer zone monitored by U.N. peacekeepers. Both sides have accused the other of violating the agreement.

South Sudan, which seceded from Sudan in 2011 under a peace deal that ended decades of civil war fuelled by ethnicity and oil, has also accepted the AU's proposals.

"Juba is committed to the proposed discussions through the African Union," Barnaba Marial Benjamin, spokesman for the government of South Sudan, said.

The row threatens to hit supplies to Asian buyers such as China National Petroleum Corp (CNPC), India's ONCG Videsh and Malaysia's Petronas, which run the oilfields in both countries.

Diplomats doubt Sudan will actually close the two cross-border export pipelines because its economy has been suffering without South Sudan's pipeline fees.

Each side is due to present their information to the African Union's committee from June 20-25. It will present its results on July 25.

(Reporting by Asma Alsharif; Editing by Alison Williams)