Sudan and South Sudan strike oil deal

Sudan and South Sudan have reached an agreement on how to share the oil riches controlled by Khartoum before the country's partition, African Union mediator Thabo Mbeki has said.

"The parties have agreed on all of the financial arrangements regarding oil, so that's done," Mbeki told reporters on Saturday, without offering details.

Mbeki said the production and export of oil would resume, but did not confirm when.

Landlocked South Sudan shut down oil production in January after failing to agree a deal on oil transit fees with its northern neighbour.

The dispute has severely impacted the economies of both countries.

A United Nations deadline for the neighbouring countries to resolve their differences - including the oil payments dispute and disagreements over borders - expired on Thursday.

Neither country has made any comment on the deal.

When South Sudan seceded from the north in 2011, it took three-quarters of Sudan's oil with it.

The dispute over how much South Sudan should pay Khartoum to transport oil through its territory has led to huge economic problems in both countries.

South Sudan has suspended all oil production, accusing its neighbour of stealing its exports, while austerity measures have sparked weeks of protests in Khartoum.

The two nations came to the brink of a full war in April after border fighting escalated, the worst violence since South Sudan became independent in July last year under a 2005 agreement that ended decades of civil war with Khartoum.

The messy divorce failed to mark the disputed border and to define how much landlocked South Sudan should pay to export its oil through the north. Oil is the lifeline of both economies.

Khartoum accuses South Sudan of supporting rebels in two of its southern border states, claims some diplomats find credible despite Juba's denials.

South Sudan itself accuses Khartoum of often bombing its side of the border.