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Sudanese Oil Deal: Step Two

Sudan and its recently jettisoned neighbor, South Sudan, have agreed to restart oil production and exports in no more than four weeks. South Sudan shut down oil production in January 2012 over a dispute with its northern neighbor. This exacted a heavy toll on both countries, whose economies rely heavily on oil export revenues but require cooperation to bring it to market: South Sudan has the raw crude, while Sudan has the refineries and access to the Red Sea.

After months of negotiations, the taps are finally coming back on, as Reuters reports:

South Sudan will be able to resume oil production within three weeks and export no more than a week after that, the oil minister said on Tuesday….

The two former civil war enemies agreed at the talks in the Ethiopian capital on Friday to order the withdrawal of their troops from a demilitarised border zone within a week to ease tensions and open the way to resuming oil exports.

The two countries’ relationship has been a rocky one since the South seceded in 2011. The ensuing two years have seen frequent border clashes and disputes over control of oil fields and pipelines. But after a rocky beginning, economic necessity has forced these two former enemies back to the negotiating table. Last Friday, both sides agreed to pull troops out of a buffer zone along their shared border, paving the way for this week’s decision to resume oil production. Though plenty of enmity surely remains between Juba and Khartoum, this is the best news we’ve heard from the region in a while.

Neither side is likely to be happy about the situation, but Sudan and South Sudan will continue to depend on one another for the foreseeable future. That’s the power of oil.

[Oil pipeline photo courtesy of Shutterstock]

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