Sudans’ oil deal announced as Bashir returns from Qatar
Omar Al Bashir, president of the cash-strapped Government of Sudan, returned home from the oil-producing Qatar emirate yesterday as a compromise agreement with South Sudan was announced in Addis Ababa.
The Sudanese leader was in the nation of Qatar since Tuesday afternoon, where he was received by Emir Sheikh Hamad bin Khalifa Al Thani. The talks ‘secured the continued expansion of Qatari investments in Sudan’ and ‘touched on the course of the negotiations between Sudan and Southern Sudan’, according to the official Sudan News Agency.
On the same evening as Bashir’s return to Khartoum, yesterday, the lead mediator of peace talks between Sudan and South Sudan announced a compromise deal to resume oil production and trans-shipment between the two countries.
That morning, in another major diplomatic encounter, US Secretary of State Hilary Clinton had met South Sudan President Salva Kiir, urging him to compromise on the oil question. Two days prior, she had phoned the Sudanese Foreign Minister Ali Karti to discuss the same issue.
Thabo Mbeki, chief mediator for the African Union and former South African president, affirmed to reporters yesterday evening that all financial arrangements regarding oil have been agreed. He said the two sides were nearly ready to ask oil companies to resume production.
Details on the agreement are not yet forthcoming. Sudan state media confirmed the oil deal today but cautioned that it would not be implemented until the two sides also reach an understanding on security issues.
In Qatar the Sudanese president had held a session of talks with the Qatari king at Al Wajbah Palace, reported the Gulf Times. The session was also joined by the Emirate’s foreign minister Hamad bin Jassim bin Jabor al-Thani, who had played a major role in peace talks between Sudan and Darfur rebels.
Qatar wields significant influence in peace talks between Sudan and South Sudan because of its role as a major Arabian creditor nation. Sudan has been seeking loans to help it overcome a massive budget gap caused by the loss of revenues from oil fields now belonging to South Sudan.
Official figures put Sudan’s budget deficit at $2.4 billion, but the real number may be far higher. The oil deal with South Sudan will help overcome the deficit by charging South Sudan pipeline fees.
According to South Sudan’s own peace proposal, released just over a week ago, South Sudan is willing to provide a ‘direct financial contribution’ of more than $3 billion over the next three and a half years, besides transit fees and arrears forgiveness, to help Sudan stabilize its public spending.
The rest of Sudan’s budget gap could be partly covered by international loans, partly by pipeline fees and direct payments by South Sudan, and partly by spending cuts and revenue hikes, South Sudan proposed.
The Sudan News Agency, citing State Minister for Foreign Affairs Salah Wansi, reported also that the Sudanese and Qatari leaders discussed potential new areas of economic cooperation in the fields of industry, agriculture and mining.
Photo by Sudan News Agency.
By Daniel van Oudenaren