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ADDIS ABABA - 12 Mar 2013

Deal puts oil resumption on two week deadline

The document signed this morning between Sudanese and South Sudanese negotiators in Addis Ababa puts oil production on track to resume within two weeks, according to the lead mediator.

This breakthrough does not represent an entirely new agreement but rather an update of the Cooperation Agreement of 27 September 2012. The text of today's agreement consists of a 'matrix,' or table, listing obligations of each side according to the earlier agreement within an updated timeframe.

African Union chief mediator and former South African President Thabo Mbeki said in remarks to Sudanese and international press that the two countries have agreed to issue orders to resume the export of oil from South Sudan through the pipelines in the territory of Sudan within two weeks.

Idriss Mohamed Abdel Gader, Sudan’s chief negotiator and minister of state at the presidency, signed the agreement with his counterpart Pag’an Amum Okiech, SPLM secretary-general, on the morning of the third day of talks in Addis Ababa.

The text of the agreement states that both governments are to “instruct oil companies to re-establish oil production” by D-Day [10 March] + 14, meaning 24 March.

The agreement acknowledges, however, that reopening the wells and pipelines could take significantly longer, commenting that “resumption of production shall take place as soon as technically feasible.”

“The Parties have the responsibility to see to it that the relevant operators will plan and conduct the actual start-up in a technically and environmentally sound manner and in accordance with international best practice,” it adds.

Oil companies last year estimated that production in some areas could take six months or longer to resume because of the technical difficulties caused by the forcible shut-down in early 2011.

Other measures included in the matrix include ‘review of existing metering system,’ which each party has to conduct on its own territory prior to resumption of production, establishment of a cross-border cooperation committee and a petroleum monitoring committee within two weeks.

They also resolved to conclude technical processing agreements within 150 days, for Sudan to transfer relevant geological data to South Sudan within 150 days, and for South Sudan to transfer the first TFA payment (transitional financial arrangement) within 40 days from the date of bill of lading for the initial oil exports.

Related: Explaining the Addis Agreements: Oil fees (6 October 2012)