Sudan Announces Agreement on Debt, Oil With Seceding South, Minister Says

Sudan said it agreed with Southern Sudan to lobby creditors for relief on its $38 billion foreign debt and set up a mechanism for the payment of fees on the export of oil from sub-Saharan Africa’s third-biggest producer.

If there is no debt relief within two years, they agreed to share responsibility for the debt, Idris Abdelgadir, state minister for presidential affairs, told parliament today in Omdurman, a suburb of Khartoum, the capital. The accord came in negotiations to prepare for oil-rich Southern Sudan’s independence on July 9.

Sudan hasn’t been able to borrow from the World Bank since 1993 because it failed to make payments on its debt and has arrears of about $30 billion, according to the Washington-based Center for Global Development, an aid research group.

Southern Sudan, which will assume control of about 75 percent of Sudan’s current oil production of 490,000 barrels a day, will pay the north fees for the use of pipelines and facilities at Port Sudan on the Red Sea to export the crude, Abdelgadir said.

Sudan’s crude is pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd and India’s Oil & Natural Gas Corp.

Almost 99 percent of Southern Sudanese voters chose independence in a referendum in January. The balloting was the centerpiece of a 2005 peace agreement that ended decades of civil war between the north and south.

The two sides are also discussing issues such as security arrangements, border demarcation and the future of the disputed region of Abyei. Sudan’s army occupied Abyei on May 21 after accusing southern forces of attacking its soldiers there two days earlier.

Southern Sudanese citizens who have been residing in the north won’t be given the choice between the citizenship of the two future separate nations, Abdelgadir said. The southerners must take the citizenship of the new state within six months to a year, he said.

By Maram Mazen 

To contact the reporters on this story: Maram Mazen in Khartoum at mmazen@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.