UPDATE 1-South Sudan says demands from Sudan delay oil restart - Reuters

By Hereward Holland

MELUT, South Sudan Nov 20 (Reuters) - South Sudan's President Salva Kiir said resumption of the country's oil output had been delayed after Sudan made new demands related to rebel fighting in Sudanese territory.

Landlocked South Sudan, which seceded from Sudan in July last year, shut down its roughly 350,000 barrels per day of oil output in January in a dispute with Khartoum over how much it should pay to export oil through Sudan to the Red Sea.

The two signed deals on export fees, security and the border over the last few months, opening the way to resuming exports, but media reports suggesting the restart would be delayed have hit the Sudanese pound in recent days.

On Monday, Sudan denied intentionally delaying the trade but said the two sides had not yet agreed on how to demilitarise their border - a condition for resuming oil flows.

Kiir, addressing supporters and reporters in Melut town in the oil-producing Upper Nile state on Tuesday, suggested the delay was related to rebellions in two Sudanese regions - Blue Nile state and the Nuba Mountains in South Kordofan state.

"We were supposed to resume oil production on November 15, five days ago. Suddenly Khartoum people changed their minds, saying we must denounce the Nuba Mountains and Blue Nile," Kiir said.

Khartoum accuses Juba of backing the rebels, known as the Sudan People's Liberation Movement North (SPLM-N), who fought alongside the southern insurgents during Sudan's decades-long civil war but were left in Sudan with partition.

South Sudan denies supporting the insurgents.

"The people (of Khartoum) are looking for an excuse for their defeat in Nuba Mountains and Blue Nile," Kiir said.

Fighting broke out last year between SPLM-N troops and government forces in South Kordofan and Blue Nile, which both border South Sudan, and has raged ever since.

Both Sudan and South Sudan - which split apart under a 2005 peace deal - depend heavily on oil for government revenues and foreign currency. (Reporting by Hereward Holland; writing by Alexander Dziadosz; editing by James Jukwey)