Sudan will revise oil transit fee demand in talks with South

Reuters News
|
Posted: Jul 25, 2012 11:36 AM
Sudan will revise oil transit fee demand in talks with South

By Aaron Maasho

ADDIS ABABA (Reuters) - Sudan will revise its transit fee demand for South Sudan's oil exports when the African neighbors resume talks to end an oil dispute for the first time since border fighting escalated in April, a Sudanese official said on Wednesday.

The U.N. Security Council has given the foes until August 2 to end all disputes or face sanctions. The neighbors came close to a war in April when their armies fought for weeks along the disputed border, the worst violence since South Sudan's secession a year ago under a 2005 peace agreement.

The African Union has been trying to mediate but both countries remain at loggerheads over where to mark the disputed border and how much landlocked South Sudan should pay to export oil through the north.

Both countries will be discussing on Thursday South Sudan's oil payments at talks in Addis Ababa, the first time since the South briefly occupied the Heglig oilfield in April which contributed much to Sudan's oil output.

Juba shut down 350,000 barrels per day output in January after Khartoum started taking some oil for what it called unpaid transit fees.

South Sudan said on Monday it was willing to pay $9.10 and $7.26 per barrel to transport oil through two pipelines passing Sudan alongside a $3.2 billion dollar package to compensate for the loss of most oil reserves to the north.

This offer is higher than before but still well below Sudan's last demand of $36 a barrel for both pipelines.

"Our position will be developed in accordance with the new position that has been presented by South Sudan in their comprehensive paper," said Mutrif Siddiq, spokesman for Sudan's negotiations team in Addis Ababa.

"Our paper is going to be revised accordingly and we'll see where we meet and where we differ and we'll try to approximate the differences as much as we can through the discussions that will take place tomorrow," he said when asked whether Khartoum was willing to lower its demand.

Oil provides about 98 percent of South Sudan's income. Juba is trying to develop infrastructure and institutions devastated by a war that killed an estimated 2 million people.

The latest round of talks, mediated by former South African President Thabo Mbeki, have broken down several times over where to set up a demilitarized border buffer zone - seen as a first step to ending hostilities.

Sudan has said it wants to make border security a priority at the talks. It accuses Juba of supporting rebels in two border states, a claim denied by South Sudan.

(Editing by Ulf Laessing and Angus MacSwan)