South Sudan to halt oil production amid row with Khartoum

Jan 20, 2012, 16:25 GMT

Johannesburg - South Sudan said on Friday it will shut down its oil production over the coming two weeks, as tensions mount between Juba and Khartoum over sharing revenues.

A process had already started to halt production, Information Minister Barnaba Benjamin told the BBC.

South Sudan became independent from Sudan in 2011 after decades of conflict, but the two sides failed to resolve the issue of profit-sharing from the oil and territorial disputes.

The south took about two-thirds of the reserves when it split but the new nation must use pipelines in the north to export the oil.

The African Union is trying to mediate, and delegations met this week in Ethiopia but failed to make headway on an agreement to divide profits.

The north is demanding about a third of the income, plus additional charges and arrears. Since the south's independence, Sudan's economy has been hit by the loss of oil revenue.

Khartoum has begun confiscating South Sudanese oil, saying it is owed payments for the use of its pipelines.

Meanwhile, violence has erupted along the poorly defined border between the north and the south. More than 400,000 people have been displaced after months of fighting, aid agencies say.

South Sudan is also facing a challenge from fresh ethnic clashes in the volatile Jonglei State, where the United Nations estimates some 120,000 people are now in need of emergency humanitarian aid.

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