* Two sides still have to agree where border lies
* Each side accuses other of backing rebel groups
* Mbeki gives no details of oil agreement
By Aaron Maasho
ADDIS ABABA, Aug 4 Sudan and South Sudan have
reached a deal on oil transit fees, but Khartoum said it would
be implemented only after the issue of border security had been
resolved, dampening hopes of a quick resumption of southern oil
exports through the north.
The oil agreement, announced on Saturday, was a big step
towards ending hostilities between the neighbours, which came
close to war in April when fighting worsened along their shared
border, created when the south seceded in July last year.
The two sides, deeply mistrustful of each other, have often
not implemented previous agreements and still need to mark their
1,800 kilometre (1,200 mile) border and resolve charges both
have made of supporting rebels in the other's territory.
The U.N. Security Council had given the African neighbours
until Thursday to resolve all conflicts left over from South
Sudan's secession a year ago under a 2005 peace agreement.
Landlocked South Sudan threw both economies into turmoil
when it shut down its output of 350,000 barrels a day in January
after failing to agree on a transit fee with Sudan, which
started seizing oil to make up for what it called unpaid fees.
African Union mediator Thabo Mbeki said the neighbours had
now agreed on how much South Sudan should pay to export its oil
through northern pipelines. He gave no details.
"It's an (oil) agreement about all of the matters. The
issues that were outstanding were charges for transportation,
for processing, transit," Mbeki, the former South African
president, told reporters.
"What will remain (now)...is to then discuss the steps as to
when the oil companies should be asked to prepare for the
resumption of production and export," Mbeki said.
He gave no time frame, saying only the parties had until
Sept. 22 to resolve border security and other conflicts.
Sudan confirmed an oil deal had been reached but reiterated
that security talks needed to resume after the Muslim fasting
month of Ramadan ended at the end of August, the state news
agency SUNA reported.
"Both sided reached understandings regarding oil which are
considered acceptable... (but) the (oil) agreement does not
fulfil the ambitions of both sides," Sudanese delegation
spokesman Mutrif Siddig told SUNA. "Its implementation will
start after understandings on security issues."
Oil industry sources have said restarting oil production
could take six months or longer as the pipelines have been
filled with water to avoid gelling and some wells were not
Mbeki's announcement was a surprise as the South's top
negotiator, Pagan Amum, had just said that Sudan was still
demanding a high oil transit fee.
In an indication of the mistrust between the arch-foes Amum,
speaking just before Mbeki, said that Khartoum was trying to
"impose very exorbitant transit fees."
Both sides had made concessions in the past few days. Juba
had last said it was willing to pay $9.10 and $7.26 per barrel
to use two pipelines crossing Sudan, as well as a $3.2 billion
package to compensate Sudan for the loss of most of its oil
reserves to the South. It had previously offered $2.6 billion.
Sudan itself lowered its demand to around $22 a barrel, from
an initial $36, according to a position paper published by SUNA.
It also wants compensation of $3.02 billion, among other
demands, Suna added.
The African Union-mediated talks, led by Mbeki, have long
been hampered by differences on where to draw a demilitarised
buffer zone, seen as a crucial first step to ending hostilities.
Amum reiterated calls for an arbitration body to resolve a
dispute over the position of their shared border, a potentially
He also accused Khartoum of maintaining a police force in
the disputed Abyei border region, despite U.N. requests for a
complete pullout by both sides.
Mbeki said Sudanese President Omar Hassan al-Bashir and his
southern counterpart Salva Kiir were due to discuss Abyei next
month, after a break for Ramadan.
"We have informed them (AU) that there has been 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
(Bashir and Kiir)," he said.
Abyei was meant to have a referendum like the South under
the 2005 peace agreement, but the two sides have been unable to
agree on who should participate.