An oil processing facility is seen at an oilfield in Unity State, South Sudan, April 22, 2012.
An oil processing facility is seen at an oilfield in Unity State, South Sudan, April 22, 2012.

JUBA, SOUTH SUDAN - South Sudan is set to resume oil exports within weeks after an agreement was signed Tuesday to allow South Sudanese crude to flow through pipelines in the north after a break of more than a year.

"It is agreed that the two countries... will provide instructions to the oil companies within two weeks... for the start of the flow of the oil," said Pagan Amum, South Sudan's chief negotiator at the talks in Ethiopia.

"Of course, the oil companies will now start preparations and as soon as it is technically possible for the oil to flow, it will flow,” he said.

Landlocked but oil-rich South Sudan shut down oil production -- a key source of revenue for the south and north -- in January last year, amid a dispute with Khartoum over fees to transport crude to export terminals via pipelines controlled by Sudan.

In April last year, the south seized control of the oil-rich border town of Heglig, nearly plunging the two countries back into war.

South Sudan's Petroleum and Mining Minister Dhieu Dau said he expects oil companies will resume production at less than 80 percent capacity initially, before ramping up to full output. Before the shutdown, South Sudan produced around 350,000 barrels of oil a day.

The two Sudans signed an agreement early Tuesday after negotiations, mediated by former South African president Thabo Mbeki, went through the night. Under the terms of the agreement, Juba pledged to resume pumping oil and Khartoum to transport and process crude from the south.

Many earlier agreements, including nine that were signed in September, have never been implemented by the two Sudans, but Amum voiced hope that the latest accord would mark "a new page" in the neighbors' acrimonious history.

“It is our hope that, with the signing of the new matrix, a new page is opened to implement all the agreements that have been signed, whether it is oil to flow... or trade or movement of our people or security in the border between the two countries,” Amum said.

Oil is vital to the economies of the two Sudans. Strict austerity measures imposed by South Sudan when it halted oil production last year led to many people living on government aid.

But with the oil set to flow again, officials in Juba said the handouts for the needy would stop.