South Sudan Agrees With Sudan to Resume Oil Export Shipments

South Sudan and Sudan agreed to order companies to resume southern oil shipments through a Red Sea export terminal within two weeks, more than a year after they were halted over a dispute about transportation fees.

“Resumption of production shall take place as soon as technically feasible,” according to an accord signed today by Pagan Amum, South Sudan’s chief negotiator, and Idris Mohamed Abdel Gader on behalf of Sudan’s government in Ethiopia’s capital, Addis Ababa. The two nations also agreed to conclude processing and transportation agreements within 150 days, according to the document.

South Sudan halted production in January 2012 after accusing Sudan’s government of stealing $815 million worth of its crude. Sudan said it took the oil to recover unpaid transportation costs and processing fees. That and other disputes, including over border security, brought the countries to the brink of war in April.

Under an agreement mediated by former South African President Thabo Mbeki, the two countries said they would order their troops to withdraw 10 kilometers (6 miles) from their disputed border. South Sudan’s president, Salva Kiir, issued orders for the troop pullback yesterday, army spokesman Philip Aguer said by phone from Juba, the southern capital.

Both sides accuse each other of supporting rebels in their territories. A similar agreement reached in September was never implemented.

Civil War

Landlocked South Sudan acquired three-quarters of the formerly united Sudan’s output of 490,000 barrels a day when it declared independence in July 2011 after a two-decade civil war. Before the oil shutdown, South Sudan depended on crude exports for 98 percent of government revenue.

The oil is pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s ONGC Videsh Ltd.

Sudan’s state minister for oil, Faisal Hamadt, said his government made preparations for the resumption of shipments, according to a statement published by the state-run Sudanese Media Centre. He didn’t say when exports may resume.

To contact the reporter on this story: Michael Gunn in Khartoum at mgunn14@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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