Sudan leaders in oil crisis talks

27 January 2012 Last updated at 11:06

The presidents of Sudan and South Sudan are meeting in the Ethiopian capital Addis Ababa to discuss a deepening crisis over sharing their oil wealth

When South Sudan became independent last July, Sudan lost most of its oil.

However, the export pipelines go through Sudan, which has seized some $815m (£520m) in oil revenue, accusing the south of not paying transit fees.

South Sudan last week said it was suspending oil production, accusing Sudan of "stealing" its oil.

The summit will bring together South Sudanese President Salva Kiir and his Sudanese counterpart - and old enemy - Omar al-Bashir.

The tensions over their oil dispute has been worsened by border clashes, with Sudan denying accusations that it had bombed a refugee camp in South Sudan housing people who had fled a conflict across the frontier.

The two countries swap accusations of backing each other's rebel groups.

Mr Kiir was a leading member of a rebel group which fought Sudan for two decades before a peace deal paved the way for the south's independence.

'Oil war'

A lot is riding on the summit as if South Sudan's threatened shutdown in oil production is completed, it would damage the already struggling economies of both countries, reports the BBC's James Copnall in Khartoum.

Some Sudanese newspapers are already calling the crisis the "oil war", he adds.

In 2011, the South Sudanese government estimated that 98% of its total budget came from oil revenues.

African Union mediators have said that Sudan and South Sudan are not far away from returning to actual conflict, he says.

The presidents of Ethiopia and Kenya will attempt to reconcile the two leaders at the talks in Addis Ababa.

On Wednesday South Sudan announced a deal with Kenya to build an oil pipeline linking its oil fields to Kenya's Lamu port, potentially reducing its dependence on Sudan for exports.

Alex de Waal, who is advising the African Union mediation panel for South Sudan and Sudan, wrote this week that such a pipeline might take three years to build.

Correspondents say there are also worries about the impact of the proposed pipeline on Lamu, which is one of East Africa's most beautiful and relatively unspoiled environments.