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South Sudan strikes deal with Sudan to export oil through pipelines

Jenny Vaughan / AFP - Getty Images

African Union lead mediator Thabo Mbeki speaks in Addis Ababa, Ethiopia, on Saturday to announce that Sudan and South Sudan have reached an agreement on how to share the oil riches controlled by Khartoum.

Landlocked South Sudan said it has a struck a deal with Sudan over oil exports through Sudan's pipelines, but the agreement won't go into effect until border issues are resolved, Khartoum officials said.

In a statement Saturday, South Sudan's government said that it will pay approximately $9.48 a barrel to transport its fuel through Sudan's pipelines.

The White House praised the deal and encouraged agreement on humanitarian issues as well.

South Sudan says the agreement on pipeline transportation fees will last for three and a half years, after which the countries may negotiate lower rates or South Sudan, which expects to have constructed a pipeline through Kenya, will stop using Sudan's pipeline.

A row over the sharing of the two countries' once-unified oil industry prompted South Sudan to shut down its 350,000-thousand-barrel-a-day oil production. Oil also sparked a dangerous military confrontation between the two sides in April, when South Sudan captured the disputed town of Heglig, which is responsible for more than half of Sudan's oil production.

The U.N. Security Council had given the African neighbors until Thursday to resolve all conflicts left over from South Sudan's secession a year ago under a 2005 peace agreement.

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U.S. Secretary of State Hillary Clinton, who on Friday urged the two nations to resolve bitter disputes that earlier this year pushed the countries to the brink of war, welcomed announcement of the oil pact.

“This agreement reflects leadership and a new spirit of compromise on both sides,” she said in a prepared statement obtained by NBC News.

“As I said in Juba yesterday, the interests of their people were at stake. … The future of South Sudan is now brighter.”

"For Sudan, too, this agreement offers a way out of the extreme economic stress it is now experiencing,” Clinton said. “If Sudan would now also take the steps to peace in Southern Kordofan, Blue Nile and Darfur, and if it will respect the rights of all citizens, it can likewise give its people a brighter future.”

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Clinton is on an 11-day tour of Africa.

President Barack Obama, in a White House statement obtained by NBC News, said, "The leaders of Sudan and South Sudan deserve congratulations for reaching agreement and finding compromise on such an important issue, and I applaud the efforts of the international community which came together to encourage and support the parties in finding a resolution. ... I am also encouraged by the announcement of a possible agreement on humanitarian access to Southern Kordofan and Blue Nile, and urge the immediate implementation of this agreement to provide urgently needed humanitarian assistance to people in these areas."

The oil deal was announced in Addis Ababa, Ethiopia, where African Union mediator Thabo Mbeki said, "It's an (oil) agreement about all of the matters. The issues that were outstanding were charges for transportation, for processing, transit," Mbeki, the former South African president, told reporters.

"What will remain (now)...is to then discuss the steps as to when the oil companies should be asked to prepare for the resumption of production and export," Mbeki said.

He gave no time frame, saying only the parties had until Sept. 22 to resolve border security and other conflicts.

The two sides, deeply mistrustful of each other, have often not implemented previous agreements and still need to mark their 1,200-mile border and resolve charges both have made of supporting rebels in the other’s territory.

This article includes reporting by Reuters and The Associated Press.

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