Sudanese leaders sign oil and trade deals

  • The leaders of Sudan and South Sudan signed deals on trade, oil and security on Thursday, alleviating tension that threatened to fuel a war between the two nations earlier this year.

    Omar al-Bashir and his Southern counterpart Salva Kiir reached the agreements following days of talks in the Ethiopian capital, Addis Ababa.

    They agreed to set up a demilitarized buffer zone and signed other deals expected to lead to the resumption in oil sales.

    Both sides have not yet discussed border issues, including the region of Abyei, which they both claim.

    South Sudan seceded from the north in 2011 and took three-quarters of Sudan's oil with it while Khartoum retained the processing and export facilities.

    A dispute over how much the South should pay Sudan in transit fees led to the South shutting down production in January this year.

    Three months later, a war nearly broke out when South Sudanese troops briefly occupied the disputed oil-rich border area of Heglig.

    The two countries' economies have been seriously damaged as a result. Oil accounts for some 98 percent of South Sudan's budget.