Sudan, S.Sudan strike oil deal

ADDIS ABABA (AFP) - Sudan and South Sudan have reached an agreement on how to share the oil riches controlled by Khartoum before the country's partition, African Union mediator Thabo Mbeki said Saturday.

"The parties have agreed on all of the financial arrangements regarding oil, so that's done," Mbeki told reporters, without offering details. Mbeki said the production and export of oil would resume, but did not confirm when.

"The oil will be flowing," he said, leaving an AU Peace and Security Council meeting in the Ethiopian capital.

"What will remain, given that there is an agreement, is to then discuss the next steps as to when the oil companies should be asked to prepare for resumption of production and export," Mbeki added.

At independence in July 2011, landlocked South Sudan took with it two-thirds of the region's oil, but the pipelines and processing facilities remained in Sudan.

In January, Juba cut off all oil production, even though oil provides some 98 percent of its revenue, crippling the economies of both countries, after accusing Khartoum of stealing its crude.

Despite the agreement, South Sudan's chief negotiator Pagan Amum accused Khartoum of violating a peace plan set out by the AU in April urging both sides to reach a comprehensive deal on all outstanding issues.

"The government of Sudan continues to violate the road map and continues to bomb South Sudan," Amum told reporters, referring to six bombs dropped on South Sudan on July 28.

Amum said Sudan could face sanctions for what he called a breach of the AU road map.

"The peace and security council in its roadmap and resolution decided that they would impose sanctions on Sudan if they fail to comply, Sudan has failed to comply," he said.

Mbeki's announcement came hours after US Secretary of State Hillary Clinton called on the two Sudans to strike an urgent compromise to end the bitter dispute and resume oil production, warning the newly separated nations that they "remain inextricably linked".

Sudan and South Sudan "will need to compromise to close the remaining gaps between them", Clinton said, after meeting South Sudan's President Salva Kiir in Juba.

"It is urgent that both sides, north and south, follow through and reach timely agreements on all outstanding issues, including oil revenue sharing, security, citizenship and border demarcation," she added.

Clinton on Friday spent around three hours in the steamy heat of Juba -- a rapidly growing city largely made up of simple tin-roof huts strung out alongside the White Nile river.

"There must always come a point where we look forward and recognise the need to stop fighting over past wrongs so we can build toward a new future," she said.

"It's time... to dig wells instead of graves," she added, quoting a South Sudanese bishop. "Time to reach an agreement that allows both countries to prosper."

Mbeki, who has mediated the talks ordered under a May 2 UN resolution, said Sudan's President Omar al-Bashir and Kiir would meet next month to find an agreement on the disputed Abyei territory, which is the size of Lebanon.

"There's an agreement between the parties that the matter of the final status of Abyei will be addressed at the next summit meeting of the presidents."

The status of Abyei was the most sensitive matter left unresolved before South Sudan's independence on July 9 last year. Sudan's army had partly occupied the territory in May 2011.

The long-running African Union-led talks in the Ethiopian capital had so far failed to produce a deal, with Khartoum rejecting Juba's offers and demanding that border security be ensured before any economic accord.

The UN Security Council had given the two countries, which earlier this year came close to a return to all-out war, until August 2 to reach a deal, or face sanctions.

The UN also told both sides to stop supporting each other's rebels.

Ahead of the agreement announced by Mbeki, Sudan had lowered its demand for oil fees from South Sudan.

Sudan had been seeking up to $36 a barrel in fees, but in a position paper released on Thursday said it was proposing $22.20 a barrel, compared with $7.61 offered by South Sudan.

Sudan accuses South Sudan of supporting insurgents on its territory, a charge that analysts believe despite denials by Juba, which in turn accuses Khartoum of backing rebels south of the border.

The two countries fought along their undemarcated frontier in March and April, sparking fears of wider war and leading to a UN Security Council resolution that ordered a ceasefire.

Mbeki said an agreement had also been reached between Sudan, the United Nations, the AU and the Arab League to allow for humanitarian access in the conflict-wracked Blue Nile and South Kordofan states.

"An agreement has been reached with the Government of Sudan with regard to the humanitarian access to Blue Nile and South Kordofan so we'll move that matter forward," he said.

Prolonged clashes between Sudanese forces and rebel groups in the two disputed territories have left thousands in a "desperate state" and in need of emergency aid, according to the United Nations.

The Sudanese government has previously accepted the tripartite plan to allow aid into the region, but the UN accused the Khartoum government of insisting on operational conditions that hampered the plan.