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South Sudan restarts oil production

Published:
2013-04-06
Author:
BBC
Source:
BBC
City/Country:
-

South Sudan has restarted oil production, more than a year after it was halted by disputes with its neighbour Sudan.

 

The two countries, which formally split in 2011, agreed to resume transfers of oil across the border last month.

 

The resumption comes as part of efforts to avoid an all-out conflict over oil revenues and border disputes.

 

South Sudan has large-scale oil production, but is landlocked and reliant on Sudan's ports for export.

 

South Sudan took with it nearly three-quarters of Sudan's oil production when it declared its independence two years ago.

 

'Sign of peace'

 

Both countries are heavily reliant on the revenues from oil exports to support government finances.

 

Production was halted 14 months ago over a disagreement about how much South Sudan should pay to export its oil through Sudanese pipelines.

 

South Sudan said the charges amounted to theft.

 

South Sudan's oil minister said the decision to resume production should be taken as a sign of peace.

 

The two countries came close to all-out war over border disputes last year, and have since agreed to set up a buffer zone along the border.

 

Resumption of oil exports is seen as an important part of the peace deal.

 

The move is also good news for the local economy. South Sudan experienced a sharp recession after the oil was shut off.

 

It is not clear how long the country will take to return to its normal output of 350,000 barrels a day.

 

The first oil is expected to reach Sudan's ports by the end of May, according to Sudan's state news agency, with output expected to reach 150,000 to 200,000 barrels a day.