AU welcomes resumption of S. Sudan oil production, export

April 11, 2013 (JUBA) – The African Union has welcomed resumption of South Sudan’s oil production, transit and export through Sudan’s pipeline, saying it’s another major step in the normalization of relations between the two countries.

Nkosazana Dlamini Zuma, the AU commission chairperson, described it as a turning point in the economic fortunes of both countries, which suffered a huge setback, since oil production was halted in 2012.

The commission, in a statement extended to Sudan Tribune, however urged the two neighbouring countries to maintain this good relations and remain steadfast on this path.

The Sudanese government announced last Friday that the first barrels of oil would begin to flow through the pipelines to Port Sudan on Saturday.

South Sudan’s petroleum minister, Stephen Dieu Dau, said the country now produces up to 10,000 barrels produced daily from its Tharjiath oilfield in Unity state.

He also told journalists that another oilfield in Unity state’s Pariang county is due to resume production in the coming days.

The United States equally welcomed the resumption of oil production in South Sudan, saying it signaled an important step in implementing a cooperation agreement it signed with Sudan last September.

“We congratulate both countries on this important step in implementing the cooperation accords they signed on 27 September 2012”, the US embassy in Khartoum said in a statement on Saturday.

“We welcome the spirit of cooperation between Sudan and South Sudan and urge the leadership of both countries to continue the full and immediate implementation of the agreements”, it added.

South Sudan took with it nearly three quarters of the oil wealth when it seceded from the north in July 2011, but remains dependent on Sudanese infrastructure to pump its oil to export markets.

The resumption of oil production marks the first stage in the implementation of a wider cooperation agreement signed by both countries in the Ethiopian capital, Addis Ababa.

South Sudan halted oil production last January following a dispute with Sudan over transportation fees.

In an increasingly bitter argument, the South also accused Sudan of diverting its oil for the latter’s own profit.

Both countries have suffered a severe economic downturn as a result of the loss of oil revenues, with South Sudan depending on oil for 98 per cent of its revenue.

The worsening economic crisis following the oil shutdown forced both countries to cut back on spending, as well as introduce a raft of austerity measures.

The two countries as a result of the oil shutdown had to cut back on spending in their institutions by introducing austerity budgets.

(ST)