Two Sudans sign peace treaty to defuse oil tensions

Sudan and South Sudan have signed a peace treaty in a bid to resolve an ongoing dispute over oil revenue, Reuters reported.

More on GlobalPost: South Sudan halts oil production as talks falter

The non-aggression pact was signed on Friday at crisis talks brokered by the African Union in the Ethiopian capital Addis Ababa.

Chief mediator Thabo Mbeki, the former president of South Africa, told reporters that both sides had agreed to respect each other's sovereignty and territorial integrity. This included “rejection of the use of force,” the BBC reported.

The deal comes after the Sudanese President, Omar al-Bashir, last week warned that the oil dispute could escalate into civil war.

When South Sudan, which is landlocked, declared independence in July 2011, it took three-quarters of Sudan's oil production.

In order to be exported, the oil must be delivered to Port Sudan through pipelines belonging to Sudan – which has admitted to taking some oil as compensation after both Sudans failed to agree on a transit fee.

In retaliation, Juba last month ordered a halt to its oil production, in a move the hurt the economies of both countries, well heavily rely on oil revenue.

More on GlobalPost: South Sudan, Kenya agree to oil pipeline

Sudan is asking South Sudan to pay fees of more than $30 per barrel, when the industry standard is closer to $1 per barrel, Voice of America reported.

South Sudan announced on Thursday that it had struck a deal allowing it to build a pipeline through Ethiopia to the port of Djibouti.

This comes after South Sudan last month signed an agreement with Kenya to build an oil pipeline to the Kenyan port of Lamu.

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