January 26, 2013 (KHARTOUM) - Sudan has dropped its demand for financial compensation over oil assets South Sudan confiscated after gaining independence, president Omer Al-Bashir announced on Friday ahead of a meeting of the African Union Peace and Security Council (AUPSC).
The two countries sealed nine agreements over disputed issues on 27 September but Khartoum’s demand of $1.8 billion as financial compensations for the confiscation of Sudapet assets in South Sudan had been left unresolved.
“As a show of good faith, and in response to their request, I announce that Sudan has dropped its arbitration suit,” Bashir said at the AUSPC meeting between heads of states and governments in Addis Ababa.
Sudanese foreign minister Ali Karti told Sudan News Agency (SUNA) that Khartoum had dropped the claim to allow the resolution of other financial and economic issues, such as an international pledge to support Sudan for the loss of oil income after South Sudan become an independent state in July 2011.
Juba has in the past refused Sudanese demands, saying it was normal to take control of assets within its territory after gaining recognition of its status as a sovereign state.
The South Sudanese government has also demanded Khartoum drop compensation claims before its participation in an international campaign to support Sudan’s demand to cancel some $40 billion of external debt.
Sudan has also stopped demanding compensation for damage to its oil installations in Heglig following its 10-day capture by the South Sudanese army (SPLA) in April 2012.