WHEN THE SOUTHERN SUDAN PEOPLE'S Liberation Movement government in Juba, South Sudan and the National Congress Party government in Khartoum broke off their negotiations in Addis Ababa early last month (June), the two sides had failed to find an accord on a proposed demilitarised buffer zone. The two countries have been at loggerheads since April when, following tit-for-tat armed clashes as well as both sporadic artillery barrages and Sudan's air attacks, South Sudan both occupied Sudan's Heiglig oil field and shut down Khartoum's vital oil pipeline. The pipeline had been shipping 300,000 barrels of crude oil each day to Port Sudan in the north, the transit fees underpinning Sudan's economy.
South Sudan is highly reliant on oil revenues. Oil constitutes 98% of Juba's revenues, but the South Sudan government claims that the Khartoum government has failed to honour payment agreements for the black gold.
Held under the auspices of the AU High Level Implementation Panel on Sudan (AUHIP), negotiations in Ethiopia were led by former South African president Thabo Mbeki and prioritised resolving the issue of oil fees. The talks followed the UN Security Council's Chapter VII resolution to end the fighting, return to peace talks and permit humanitarian assistance to reach those affected by the conflict on both sides of the border.
Yet the oil pipeline dispute shows no signs of being resolved. South Sudan's Foreign Minister, Nhial Deng Nhial is on record as saying that his government "was ready to pump no oil for two years" while it tried to negotiate "a fair tariff" with Khartoum to transport it. Industry experts say that even if an agreement were reached, it would take many months of maintenance work to ramp up operations before the oil could start to flow again.
South Sudan is said to be trying to reach agreement with Ethiopia and Djibouti to build a pipeline to the Red Sea--and another pipeline to Kenya's new port at Lamu on the Indian Ocean is also being pondered. The problem is, however, that these projects would take many years to complete and investors would undoubtedly be nervous of backing a major infrastructure programme in a region so prone to conflict.
An influx of returnees
Adding to the problems faced by both sides in this simmering dispute is the number of displaced peoples in the two countries. In Sudan, insurgency in both South Kordofan and Blue Nile states has led...