After more than two years of negotiations, Sudan and South Sudan have agreed on financial terms for the export of South Sudan’s oil via Sudan. According to a statement released by the South Sudanese government, South Sudan will pay fees of between US$9.10 and US$11 per barrel for use of Sudan’s pipeline and export facilities. South Sudan has also agreed to provide a US$3.028 billion grant over three and a half years to mitigate the drop in Sudan’s income caused by the south’s secession last year.
A proposal for a new agreement published by South Sudan last month provided for a Monitoring Team comprising representatives from both governments as well as international experts. It is not yet clear if this safeguard will be included in the final oil deal. Though a Monitoring Team is a potentially effective way to verify that the agreement is being adhered to, on its own it does not correct the fundamental flaws of the previous oil deal.
The South Sudanese proposal also called for an audit of the transportation system from the point where the crude oil enters Sudan to when it is loaded onto the ships. Global Witness supports the idea of such an audit and believes that it should verify that all metering stations are functioning properly and that there are effective systems in place for recording volumes. Its results should be published.