Sudan and South Sudan reach agreement in principle on oil

An agreement in principle on the amount of the fee paid by the South Sudan in Sudan to use its pipelines was signed by the oil ministers of the two countries, according to press reports published Thursday.
Sudanese pipelines, leading to Port Sudan on the shore of the Red Sea, are vital to South Sudan to export its crude. Due to falling world prices and the amount of this fee, set so far to 24 dollars per barrel, it is selling this crude at a loss.
Global Witness, an NGO fighting against corruption related to natural resources, had said in January that South Sudan was selling its oil around $ 20 a barrel.
At a meeting on Wednesday in Juba, the capital of South Sudan, the two ministers agreed that instead of a flat fee, it would now be indexed to the price of crude.
“We discussed and we agreed on the principle of a revision of the agreement,” said the South Sudanese Minister of Petroleum and Mining Stephen Dhieu Dau, quoted by the Sudan Tribune website.
The fee “fluctuate upward or downward, depending on the price of crude in the world,” he added. Sudanese counterpart Mohammed Awad explained that the technical details of the agreement had yet to be established, according Tamazuj radio.
Proclaiming its independence on 9 July 2011, after decades of conflict with Khartoum, South Sudan inherited 75% of the oil reserves in the pre-secession Sudan. But landlocked, it continues to depend on Sudanese infrastructure for export.
The economy of the youngest countries in the world, which plunged in December 2013 civil war is on the verge of collapse.