Agreement on extending oil transit deal until 2022 with South Sudan

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Sudan and South Sudan agreed on Wednesday to extend the agreement on the transit of oil for export through Port Sudan on the Red Sea until 2022.

According to (Sudan Tribune) Hamid Suleiman Hamid the Undersecretary of the Ministry of Energy and Mining said that the talks discussed the renewal of the agreement on the oil transit through the Sudanese ports as well as the resumption of oil production of the Thar Jath field in the Unity region.

“We have reached great understandings by agreeing to extend the agreement on the transfer of crude until March 2022,” he added.

Last October, Juba indicated that it would renegotiate the 2012 oil deal with Khartoum because it would not be able to meet a December deadline of $ 3 billion agreed to help Sudan to cover the financial gap created by the independence of South Sudan in 2011.

Further, the deal which was struck in August 2012, provides that the landlocked said the new country would pay a pipeline transit fee of $9.48 per oil barrel to transport its crude through Sudan.

The South Sudanese negotiating team headed by Mayen Wol Jong the Undersecretary of the Petroleum Ministry arrived in Khartoum on Monday.

The agreement was signed by Undersecretary of the Ministry of Energy and Mining Hamid Suleiman and his South counterpart Jong.

On the settlement of outstanding debts between the two countries amounting to $ 661 million, Suleiman said that talks will resume next week after consultations with the governments of the two countries.

“We have asked the South Sudanese government to pay the remaining amount in kind.”

Suleiman pointed out that the South Sudanese government proposes to it with the pipeline transit fee to become $15 per oil barrel.

“There must be an agreement on the method of payment before the end of December,” he further said.

For his part, Jong in statements to Sudan Tribune stressed on the importance of extending the agreement in the interest of both countries. He further added they are ready to discuss all obstacles.

Regarding the re-operation of the Thar Jath field, he said that they have asked the Sudanese side to assist in completing the technical procedures for its re-operation.

Also, he pointed to the need to transport the machines from Port Sudan to the field and the start of technical works on the second of next December.

On the settlement of outstanding debts, the South Sudanese official said that Juba had paid $ 2.4 billion and the rest would be paid in the future particularly after the increase of oil income with the resumption of production of Thar Jath field.

Further, he did not rule out an agreement on the method of payment in the upcoming round of talks.

South Sudan provides Sudan with 28,000 barrel of crude oil per day to be used in power production and cover its local needs.

In February 2016, the two Sudans agreed that the South will provide the North with 28,000 barrel of crude oil per day to be used in power production and cover its local needs.

According to the deal, which was seen as a solution to the payment of Sudan transit fees and the three billion support, 18.000 barrel oil crude per day go to Um Dabakir power plant in the While Nile state while additional 10.000 barrel of oil crude are supplied to Khartoum refinery.

The price of the oil crude has been calculated according to the international market.

Source: Sudan Tribune

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