JUBA, South Sudan (AP) — South Sudan ordered oil companies to restart production Thursday and officials said oil export could resume in about 90 days, ending a nearly nine-month shutdown following a dispute with Sudan over borders and oil.
Sudanese President Salva Kiir and his Sudanese counterpart President Omar al Bashir signed an agreement last month in the Ethiopian capital that addressed several issues including residency, work and travel rights for citizens of both countries, and a demilitarized buffer-zone to reduce tensions along the oft-disputed border. Perhaps the most critical part of the agreement is the provision that allows South Sudan to export its oil through the port and pipelines in the north.
South Sudan's National Legislative Assembly on Tuesday approved the agreement, which attempted to cover issues left over from the 2005 Comprehensive Peace Agreement which ended 21 years of civil war between Sudan and South Sudan and led to the south's eventual split from Khartoum last July.
South Sudan's Minister of Petroleum and Mining, Stephen Dhieu Dau, said the nine-month shutdown "had served its purpose to protect the sovereignty and patrimony of the nation" and had ensured "once again that the South Sudanese People may exercise the right to enjoy the full benefits of their resources."
South Sudan inherited three-quarters of Sudan's oil production when it declared independence last year. But the country lacks the infrastructure to refine or export its oil, and must pump it through pipelines running north to Port Sudan for export. In January, Juba accused Khartoum of stealing nearly all of its oil. Khartoum said it had taken the oil in lieu of unpaid fees for the use of its facilities.
In signing and ratifying the Addis Ababa agreement, South Sudan has agreed to pay $9.10 and $11.00 per barrel for the pipelines operated by Dar Petroleum and the Greater Nile Petroleum Operating Company, respectively.
The production of oil could provide much needed relief for the economy of South Sudan. The government had imposed austerity measures in recent months to account for the loss of their oil revenue - which accounted for around 98 percent of the yearly budget. The South Sudanese Pound also fluctuated wildly in the wake of the shutdown, falling on the black market from around 3.5 pounds per dollar to around 5.5 in July. The rate has recently rebounded following news of the deal in Addis Ababa.