Addis Ababa (Alshahid)-Sudan and South Sudan had reached a deal on oil transit fees, a first step towards ending a dispute which had brought the hostile neighbours close to war.

The former South African president, Thabo Mbeki, declared on Saturday that a breakthrough on oil and promising progress on other issues was made at the talks, held in Addis Ababa, the Ethiopian capital.

According to Mbeki, the two sides are observing the calls by AU and UN not to engage in military aggression and they have shown willingness to bridge their differences on major issues such as border demarcation and political security.

He said “They have agreed to refer border issues to legal experts”- a panel, headed by Justice Abdul G. Koroma of Sierra Leone, established by the AU.

Both sides agreed Juba would pay Khartoum a package amounting to about $3 billion, as well as a per-barrel fee for sending its oil through the north’s infrastructure for export via Port Sudan.

Juba said the fee is $9.48 per barrel.

Oil has been at the heart of tensions and economic difficulties for Sudan since the South separated in July last year with roughly 75 percent of the 470,000 barrels per day produced by the unified country before independence.

The lost oil accounted for more than 85 percent of Khartoum’s export earnings, which reached $7.5 billion in the first half of 2011, according to the World Bank.