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Sudan, South Sudan Leaders Agree to Keep Oil Flowing

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Sept. 3 (Bloomberg) -- Sudanese President Umar al-Bashir said he reached agreement with his South Sudanese counterpart, Salva Kiir, to keep southern oil flowing through the north’s pipelines and Port Sudan.

Al-Bashir spoke after the two leaders met today in the Sudanese capital, Khartoum, three days before a deadline Sudan had announced to halt shipments of crude unless the south withdrew support for rebels opposed to his rule. South Sudan denies backing the fighters and accuses Sudan of deploying troops in its oil-producing Upper Nile region.

“We were able to agree on removing all obstacles hindering relations between both countries through the full commitment to implement all operational agreements,” state-run Sudan News Agency quoted al-Bashir as saying after the talks.

Landlocked South Sudan exports all of its crude via a pipeline through Sudan and Port Sudan on the Red Sea.

A dispute last year between the two countries over exports shut down oil production, which cut the size of South Sudan’s economy by half to $9.34 billion, according to World Bank data. The country has sub-Saharan Africa’s third-biggest oil reserves, after Nigeria and Angola, according to the BP Statistical Review of World Energy.

South Sudan seceded from Sudan in July 2011 and took three-quarters of the formerly united country’s oil output of 490,000 barrels a day. Its low-sulfur crude, which is prized by Japanese buyers for use as clean-burning power-generation fuel, is pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp.

Production is currently 100,000 to 180,000 barrels per day, according to the South Sudanese Petroleum Ministry.

To contact the reporters on this story: Maher Chmaytelli in Dubai at mchmaytelli@bloomberg.net; Salma El Wardany in Cairo at selwardany@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net

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