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Sudan, South Sudan extend oil deal until March 2022

By East Africa correspondent , Garowe Online

JUBA - South Sudan and Sudan authorities have agreed with an extension of the oil deal, which would see the two nations work together for another period of two years.

Since 2012, South Sudan has been using Sudan's pipelines to transport oil from mining areas, a partnership that has seen Khartoum benefit immensely.

After relinquishing independence for South Sudan in 2011, Sudan mainly gets revenue through transportation, having lost nearly all oil deposits.

The agreement was signed by Sudanese Minister of Energy and Mining Adil Ali Ibrahim and South Sudan’s Oil Minister Awou Daniel Chuang.

“The agreement represents a great step to boost the cooperation between the two countries in the oil and gas sector through a spirit of fraternity and cooperation for the interest of the two countries,” Ibrahim told SUNA agency, Tuesday.

Chuang, a key minister in President Salva Kiir's administration, lauded the new deal, arguing that it would give South Sudan much needed time to establish infrastructure.

He said: "This agreement gives us more time to establish our much-needed infrastructure, some which are currently underway."

The agreement, signed in Khartoum, stipulates that South Sudan pays $26 for each oil barrel passing through the Sudanese pipeline operator, Petrolines for Crude Oil Ltd.

It belongs to the Greater Nile Petroleum Operating Company. And $24.1 for each oil barrel transported through Bashayer Pipeline Company which belongs to Petrodar Operating Company.

South Sudan should also supply Khartoum Refinery and Um-Dabakir Station with 28,000 barrels of crude oil on a daily basis, according to the agreement.

Both nations have been struggling with insecurity in recent months. Sudan witnessed a coup that led to the toppling of Omar Al-Bashir in April this year.

Prime Minister Abdalla Hamdok has been making shuttle diplomatic trips abroad to push for the lifting of economic sanctions that have hurt the economy of the nation.

For their neighbors in South Sudan, the political conflict involving President Kiir and former Vice President Riek Machar have threatened to sabotage the economy.

However, the two warring sides have agreed to form a transitional government following pressure from regional blocs like IGAD and the AU.

Kiir has also been struggling with corruption claims on oil-related deals, something that has irked internal governance conflict.


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