South Sudan, Ethiopia Sign Oil Pipeline Deal

Posted February 9th, 2012 at 8:55 am (UTC-5)
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South Sudan has signed a memorandum of understanding with Ethiopia allowing it to build an oil pipeline through Ethiopia to the port of Djibouti.

South Sudan’s information minister announced the deal Thursday, amid a bitter oil dispute with Sudan that has prompted the south to halt production.

Landlocked South Sudan had been shipping oil in pipelines running through Sudan to Port Sudan on the Red Sea.

Last month, South Sudan accused Sudan of seizing more than $800 million worth of its oil at the port.

Khartoum says it took the oil because the south would not pay transit fees of more than $30 per barrel.

In recent weeks, South Sudan has also discussed plans with Kenya to build oil pipelines to the coast town of Lamu.

Tension between the two Sudans has been running high, and leaders on both sides have said a return to war is possible.

South Sudan separated from the north last July, six years after the end of a 21-year civil war.

The sides have not been able to agree on how to demarcate their border or how to share oil revenue. The south, at independence, took over three-fourths of the oil production from the former unified Sudan.