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Will new talks between Sudan and South Sudan end oil dispute?

In January, South Sudan cut off oil production, accusing its northern neighbor of stealing its oil. Now the African Union is aiming to settle things down.

By Scott BaldaufStaff writer / March 5, 2012

An oil well oozes crude oil after it was hit by a shrapnel from a bomb dropped by fighter jets at the El Nar oil field in South Sudan's Unity State, March 3. South Sudan accused Sudan of bombing two oil wells in the north of the new nation and moving troops and weaponry close to an army base near the poorly defined border.

Hereward Holland/REUTERS

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Here’s how the Sudan peace plan of 2005 was supposed to work: After 22 years of civil war, South Sudan would try to coexist with the Sudanese government in Khartoum, and if that didn’t work out, they could secede and form their own country. The South would pump oil, the North would pipe it out to Western markets for a fee, and everyone would be happy.

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Here’s what happened: South Sudan and Khartoum didn’t get along, South Sudan seceded in July 2011, and the two countries have been fighting, rhetorically and militarily through proxies, ever since.

Now, tensions are bringing the two countries perilously close to war. In the northern states of South Kordofan and Blue Nile, rebels once allied with the South have been waging a guerrilla war against Khartoum, and Khartoum has responded with carpet bombing of civilian areas. Ethnic rivalries in the South Sudan states of Jonglei and Unity have broken out into fighting, and tens of thousands have been displaced. The South reports that northern MiG jet fighters have bombed oil fields this past weekend, and refugee camps in the South. In January, South Sudan accused Khartoum of siphoning off Southern oil for its own refineries, and has shut off oil production, pushing both economies to the brink of collapse.

Peace efforts by former South African President Thabo Mbeki attempted to bring both sides back to the negotiation table in January during the African Union’s summit meeting in Addis Ababa, to no avail. But a fresh round of talks over oil pipeline fees, starting Tuesday in Addis Ababa, give the two sides a chance to pull themselves back from the brink.

Amb. Princeton Lyman, the US government’s special envoy to Sudan, told reporters in a Jan. 25 telephone conference call that the situation between the two Sudans is serious, but that war is not inevitable.

“I don't think either Sudan or South Sudan wants or intends to go back to full-scale war,” Ambassador Lyman said in the Jan. 25 conference call. “The relationship is bad. So there is a danger that things could get out of control, that incidents could lead to greater conflict. That's why these issues are so terribly important, not only in and of themselves but to prevent exactly what you're talking about. But I think both sides recognize that going back to full-scale war would be disastrous.”

In theory, these two countries should be eager to return to the negotiation table out of sheer self-interest. South Sudan ended up receiving about 75 percent of all oil-production after secession, making it a potentially very rich country. This is good news, because South Sudan will need a lot of money to rebuild its country after 22 years of civil war. But South Sudan is a land-locked country, and the only pipelines that can currently take its oil out to foreign markets run through northern Sudan.

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