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The Ethiopian government agreed with the Sudanese
government last Thursday to resume oil imports from
its northern neighbour.
Following the expiration of the agreement the two
countries signed in 2002, Ethiopia was looking for
an alternative supplier in the Middle East as it
could not strike a deal with Sudan to extend the
procurement.
“We have reached an agreement after finishing
details left unsettled after the previous accord
expired,” Alemayehu Tegenu, minister of Mines and
Energy of Ethiopia, told Fortune.
Alemayehu signed the
agreement with his Sudanese counterpart, Awad Ahmed
Al Jass (PhD) last week January 10, 2007 at the
Sheraton Addis.
Sudan has been annually supplying 80pc of Ethiopia’s
annual consumption of benzene (120,000 metric tonnes)
for the past five years on credit. However, the
previous procurement agreement fell into uncertainty
in May 2008 when the United States (US) Treasury
Department imposed sanctions on the Sudanese
state-owned oil supplying company, Sudan Petroleum
Corporation (SPC), claiming the Sudanese government
provides arms to the Janjawid Islamic Group from oil
revenues.
The Commercial Bank of Ethiopia (CBE) could not
therefore transfer 2.5 million dollars to SPC
through Citibank for the oil it procured on credit.
Though the Ethiopian government then proposed a
countertrade (in kind) to pay the Sudanese
government in agricultural products, the two parties
were unable to reach consensus on the value and
volume of the grains.
Subsequently a senior delegation led by Girma Birru,
minister of Trade and Industry, that includes Yigzaw
Mekonnen, director general of Ethiopian Petroleum
Enterprises (EPE), and Abie Sano, president of CBE
left for Saudi Arabia to explore options. The
delegation held discussions with senior officials of
the Saudi government.
However, amidst expectations that the country would
switch to Saudi Arabia for its oil needs, the
Sudanese government accepted the countertrade
proposal and payment in currencies other than
dollars.
“There are some new requests that we accepted in the
latest agreement,” Alemayehu told Fortune.
The Minister said the agreement was limited to one
year because Ethiopia’s consumption increases
annually.
“We have agreed to renew our agreements every year,”
he said.
The construction of an asphalt road, according to
Alemayeu, would simplify the transportation of the
commodity.
The 156Km Gadarif-Doka-Gallabat-Metema road was
officially inaugurated in December 2007 by Prime
Minister Meles Zenawi and Sudanese President Omer
Hassan al-Bashir.
The two countries also discussed electric power
export to Sudan a year after the discussion failed
due to tariff disagreements.
“We have also agreed to resume the discussion,”
Alemayehu told Fortune.
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