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August 04, 2012 12:00:00 AM
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Sudan and South Sudan have reached an agreement on how to share the oil riches controlled by Khartoum before the country's partition, African Union mediator Thabo Mbeki said Saturday.

"The parties have agreed on all of the financial arrangements regarding oil, so that's done," Mbeki told reporters, without offering details. Mbeki said the production and export of oil would resume, but did not confirm when.

"The oil will be flowing," he said, leaving an AU Peace and Security Council meeting in the Ethiopian capital.

"What will remain, given that there is an agreement, is to then discuss the next steps as to when the oil companies should be asked to prepare for resumption of production and export," Mbeki added.

At independence in July 2011, landlocked South Sudan took with it two-thirds of the region's oil, but the pipelines and processing facilities remained in Sudan.

In January, Juba cut off all oil production, even though oil provides some 98 percent of its revenue, crippling the economies of both countries, after accusing Khartoum of stealing its crude.

Mbeki's announcement came hours after US Secretary of State Hillary Clinton called on the two Sudans to strike an urgent compromise to end bitter disputes and resume oil production, warning the newly separated nations that they "remain inextricably linked".

Sudan and South Sudan "will need to compromise to close the remaining gaps between them," Clinton said, after meeting South Sudan's President Salva Kiir in Juba.

"It is urgent that both sides, north and south, follow through and reach timely agreements on all outstanding issues, including oil revenue sharing, security, citizenship and border demarcation," she added.


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