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South Sudan continues to disburse oil arrears despite fall of prices: Sudan

April 2, 2020 (KHARTOUM) - A Sudanese official said that South Sudan is committed to the financial compensations of the 2012 oil deal between the two countries despite the huge drop in global crude oil prices.

A worker walks through an oil production facility in Paloch in South Sudan’s Upper Nile state, on 5 May 2013 (Photo: Hannah Mcneish/AFP)

In November 2019, the two countries agreeing to extend for the second time the oil agreement allowing South Sudan to export its crude through its northern neighbour until March 2022.

The civil war-affected country said it would not be able to meet a deadline in December 2019 of three billion dollars Juba had agreed in 2012 to pay to Khartoum to cover the financial gap created by the independence of South Sudan in 2011.

Hamid Suleiman, the Undersecretary of the Ministry of Energy and Mining on Wednesday told Sudan Tribune that the agreement was not affected by the drop in global oil prices to about $ 30 a barrel.

"The agreement is proceeding normally," he said.

He further added that debt fell to about $ 500 million.

"Khartoum’s debt to Juba has decreased from 600 million dollars to about 500 million now because South Sudan continues to supply Sudan with 28,000 barrels per day for the Khartoum refinery and Umm Dabakir thermal plant," he said.

The oil income is the main source of revenue for landlocked South Sudan, while the fees of oil transfer through Sudan’s pipelines and Red Sea ports continue to be an important income to the country.