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Sudan and South Sudan loosen oil flow with partial deal

The presidents of Sudan and South Sudan have inked cooperation and trade deals designed to restart the flow of South Sudanese oil through Sudanese pipelines. The uncomfortable neighbors still dispute their border.

South Sudan said oil production and deliveries would resume by the end of the year after the signing of a landmark deal with Sudan at an African Union (AU) summit.

"Today is a great day in the history of our region, and in particular Sudan and South Sudan, as we witness the signing of the cooperation agreement that brings to an end the long conflict between our two countries," South Sudan's President Salva Kiir said at the signing ceremony in a five-star hotel in Addis Ababa. The the Ethiopian capital hosts the headquarters of the AU.

The South's chief negotiator, Pagan Amum, was confident of a swift resumption of oil deliveries.

"We have already started the preparations … I believe by the end of the year, the oil will flow," he said.

The South shut down its oil output entirely in January amid a dispute with Sudan over transit fees.

Kiir and his Sudanese counterpart Omar Hassan al-Bashir signed the agreement to a round of applause, with the partial deal the culmination of months of AU-brokered peace efforts.

In this photo released by the United Nations Mission in Sudan (UNMIS), homes are seen burning in the town of Abyei, Sudan, Monday, May 23, 2011.

The border region of Abyei, among others, remains contested

"We are convinced that what has happened, which culminated in signing of the agreements, constitutes a giant step forward for both countries," AU mediator Thabo Mbeki said.

Oil and a buffer zone, but no border deal

The defense ministers from the two countries also penned a deal agreeing to a demilitarized buffer zone along the disputed border.

Bashir said it was a "historic moment for building peace" between the new neighbors, formerly locked in a long-running civil war before South Sudan gained independence last year.

Several regions rich in oil resources, most notably the Abyei region that is also home to rich grazing lands, remain disputed between the two countries.

Kiir thanked his counterpart Bashir for his cooperation in the difficult talks, with the Sudanese facing pressure from the African Union and the broader international community to broker a deal, but blamed the Sudanese president for the failure to set a fixed border.

"Unfortunately, my brother Bashir and his government totally rejected the proposal on Abyei in its totality," Kiir said at the ceremony.

South Sudan's independence, a condition of a peace deal to end Sudan's civil war, went ahead before the two sides had agreed on issues like border demarcation, citizenship and oil transit fees. Though the South is now richer in oil reserves, most of the infrastructure necessary for transport and export belongs to Sudan.

msh/pfd, ipj (AFP, dpa, Reuters)