* South Sudan to complain to UN about pipeline bombing
* Sudan denies responsibility, says not in its interest
* Oil transport row could escalate into bigger conflict
* Both sides in talks to resolve oil dispute
By Hereward Holland
EL NAR OIL FIELD, South Sudan, March 6 (Reuters) - At an oil well in South
Sudan, Mohamed Lino clambered into a metre-deep (3-ft) crater as crude oozed
out of shrapnel-damaged pipes, the wreckage of what the government said was
an air attack by its old enemy the north.
"This is where the bomb fell ... If the oil had been flowing there would
have been big, big damage," said Lino, director general of South Sudan's oil
ministry, examining the churned earth beneath his feet.
Last week's bombing, for which Sudan denies responsibility, raised the
stakes in a bitter row over oil transportation fees that analysts say could
escalate into full-scale war.
South Sudan declared independence last year after voting overwhelmingly for
secession in a referendum, part of a 2005 peace deal to end decades of civil
war. But the peace remains uneasy at best, with north and south accusing
each other of waging proxy wars in states along their ill-defined frontier.
The northern government, which relies heavily on revenues from southern oil
piped through its territory, denied bombing the well that sits just 10 km (6
miles) from the border.
Officials in the south said the air strike on El Nar set a precedent by
targeting energy infrastructure and described it as a dangerous escalation.
"They bombed this place because of the oil," said Miakol Lual, the
traditional chief of El Nar, who said the planes came from the northeast and
flew off in the same direction.
At another bomb site shown to reporters, Lino picked over a pile of grey
bomb fragments, looking for markings that might suggest its origin, without
success.
"Sudan did not bomb any territory in South Sudan," said Rabie Abdelaty, an
information ministry official in Khartoum. "There's no reason for Sudan to
attack oil equipment or wells. Sudan has interests in this oil because it
normally flows through our pipeline. We didn't do this."
DANGEROUS GAME
South Sudan's government said it would file a complaint to the United
Nations Security Council accusing Sudanese warplanes of dropping at least
three bombs on the El Nar field on Feb. 29.
North and south separated without agreeing how much the landlocked South,
which inherited most of the pre-split Sudan's known oil reserves, should pay
to use oil pipelines, processing facilities and a port in the north.
"It is a very dangerous game because Sudan's (only) oil field is not that
far from where they dropped the bomb. If the South decides to retaliate then
the two countries will lose," said Chom Juaj, vice president of Greater Nile
Petroleum Operating Company, which operates the fields in South Sudan's
Unity state.
He said the bombing was designed as a demonstration of the north's power and
military reach.
The two armies skirmished on the border at the end of 2011. Analysts say
neither side has the appetite or the money to return to full-scale war but,
with no oil currently flowing, one disincentive for head-on conflict has
gone.
South Sudan's government in Juba shut down its 350,000 barrel-per-day oil
production in January after the north seized over $800 million of the
south's oil and built a tie-in pipeline to divert it through refineries in
Khartoum.
TOUGH TALKS
The two governments met in Ethiopia on Tuesday to try to break the deadlock
over oil transit fees.
The South is offering less than $1 per barrel while Sudan wants $6 plus a
renegotiation of pipeline and processing fees which would push costs to $36
per barrel.
Samson Wassara, a political science professor at Juba University, said
all-out war was still unlikely and that the bombing may have been intended
as a message just days before the negotiations resumed.
"Khartoum is sending a signal saying 'if you divert the oil and we do not
benefit from anything then we can destroy that oil and create instability so
that you don't enjoy the benefits of that oil,'" Wassara said.
The bombing also came two days before a groundbreaking ceremony for Lamu
port in Kenya, which South Sudan hopes to use to export crude once it has
built a new southern pipeline.
The new pipeline, which the south believes it can build in 11 months, would
divert oil that previously flowed to the north and leave Sudan with a
pipeline that has not yet paid for itself.
"It's most likely that the added mistrust and tension (caused by the
bombing) will just strengthen Juba's resolve to build alternative export
routes," said Dana Wilkins, researcher at campaign group Global Witness.
(Additional reporting by Khaled Abdelaziz; Editing by Andrew Heavens and
Robin Pomeroy)
* Sudan, South Sudan complain about each other to U.N. council
* Security Council gravely concerned by border clashes
By Michelle Nichols
UNITED NATIONS, March 6 (Reuters) - The U.N. Security Council reprimanded
Sudan and South Sudan on Tuesday for repeated cross-border clashes that were
fueling tensions over oil exports and territory disputes and had become "a
serious threat to international peace and security."
South Sudan declared independence last year after voting overwhelmingly for
secession in a referendum, part of a 2005 peace deal to end decades of civil
war. But the peace remains uneasy at best, with north and south accusing
each other of waging proxy wars in states along their ill-defined frontier.
The council expressed in a statement "grave concern about reports of
repeated incidents of cross-border violence ... including troop movements,
support to proxy forces, and aerial bombardments, and views the situation as
a serious threat to international peace and security."
The statement came after the two countries complained to the U.N. Security
Council about each other. The ambassadors to the United Nations for Sudan
and South Sudan both denied on Tuesday any wrongdoing.
The Security Council demanded "that the Governments of Sudan and South Sudan
take no action that would undermine the security and stability of the other,
including through any direct or indirect form of support to armed groups in
the other's territory."
North and south separated without agreeing how much the landlocked south,
which inherited most of the pre-split Sudan's known oil reserves, should pay
to use oil pipelines, processing facilities and a port in the north.
South Sudan's government in Juba shut down its 350,000 barrel-per-day oil
production in January after the north seized more than $800 million of the
south's oil and built a tie-in pipeline to divert it through refineries in
Khartoum.
OIL ISSUES
The two countries last month signed a pact agreeing to "respect each other's
sovereignty and territorial integrity, non-interference in internal affairs,
rejection of the use of force, equality and mutual benefit; and peaceful
coexistence."
Then last week South Sudan accused Sudan of bombing an oil well. Sudan
denied responsibility. The two governments met in Ethiopia on Tuesday to try
to break the deadlock over oil transit fees.
"The Security Council regards the settlement of oil and financial
arrangements between the Governments of Sudan and South Sudan as a critical
element of the two countries' security, stability and prosperity as viable
states," the statement said.
"The Council affirms that any unilateral action related to the oil sector is
detrimental to the security, stability, and prosperity of both states."
The U.N. Security Council also said there was a grave urgency for
humanitarian aid to be delivered to the Sudanese border states of South
Kordofan and Blue Nile, where fighting has been raging for months between
the Sudanese army and rebels who want to topple the Khartoum government.
The fighting in recent months has forced about 417,000 people to flee their
homes, more than 80,000 of them to South Sudan, according to the United
Nations.
Sudan's U.N. ambassador, Daffa-Alla Elhag Ali Osman, said on Tuesday the
humanitarian situation in Southern Kordofan and Blue Nile was "very normal."
(Editing by Mohammad Zargham)
C Thomson Reuters 2012 All rights reserved
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Received on Tue Mar 06 2012 - 16:27:16 EST
