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AFP
UN chief Ban Ki-moon said Sunday a crisis between former enemies Sudan and South Sudan has become a major threat to regional peace and security.

"The situation in Sudan and South Sudan has reached a critical point, it has become a major threat to peace and security across the region," Ban told an African Union summit in the Ethiopian capital.

South Sudan split from Khartoum in July after decades of war, but key issues remain unresolved, including a furious row over pipeline transit fees to transport the South's oil to port in the rump state of Sudan.

In addition, tensions have been raised by their still undemarcated border -- cutting through oil fields -- as well as mutual allegations that each side backs proxy rebel forces against the other.

"The international community needs to act, and it needs to act now," Ban added. "As long as these issues remain unresolved, tensions will only grow."

Asked by reporters whether he feared that war could break out again, Ban replied: "That is also a great concern for me as secretary general. That is why I'm meeting as many African leaders as possible."

Tensions are high. South Sudan said Sunday that it has nearly completed a drastic shutdown of its oil production -- the fledgling nation's top revenue source -- as talks with Khartoum over the oil dispute remain stalled.

"There is very little oil (being produced). ... There is no export and no flow through the north," South Sudan's Minister of Petroleum and Mining Stephen Dhieu Dau told AFP Sunday. The claims could not be independently confirmed.

South Sudan has also demanded the handover of the contested border region of Abyei, claimed by both sides, but which the northern army has controlled since storming the region last year, after a planned referendum there was stalled.

Ban accused both Sudanese President Omar al-Bashir and South Sudanese President Salva Kiir of "a lack of political will."

However, in rare singling out, the UN chief specifically urged Bashir to cooperate in resolving the crisis.

"I urge him (Bashir) again to fully cooperate with the United Nations," Ban said.

Around two million people died in the 1983-2005 war between then southern rebels and the government in Khartoum, and almost 99 percent of southerners voted in a 2011 referendum for independence to break free from the north.

Landlocked South Sudan took with it three quarters of the country's oil when it split from Sudan, but all pipeline and export facilities are controlled by Sudan.

Sudan agreed Saturday to free ships with South Sudanese oil as a goodwill gesture to ease negotiations, in the hope that oil pumping would resume.

Both countries depend on oil income for a key part of their struggling economies, and oil makes up over 90 percent of South Sudan's revenue.

But Juba, which accuses Khartoum of stealing $815 million worth of oil, said the offer to release tankers with 2.2 million barrels of oil from Sudan's Red Sea port was not enough.

"If we want to continue negotiating with Khartoum then they must meet the minimum demands. ... The stolen crude must be paid back to South Sudan," Dau said.

Khartoum has said that Juba had not paid it for using its pipelines and refinery since South Sudan seceded in July, and admits to having confiscated 1.7 million barrels of South Sudan crude.

China, which relies on South Sudan for nearly five percent of its oil and is also a key ally of the Khartoum government, has been supporting negotiations between the two sides.

This week South Sudan signed an agreement with Kenya to build an oil pipeline to a Kenyan port, potentially freeing it from its dependence on exporting oil through Sudan.

However, industry experts have said that building a pipeline could take more than three years and cost as much as $4 billion -- a staggering cost for the South, where oil production is already close to peaking.

South Sudan last week accused Khartoum of bombing its territory, the latest in several reported border attacks, in areas where northern refugees are fleeing civil war in Sudan's Blue Nile and Southern Kordofan state.

On Sunday in Southern Kordofan rebels once allied to the South's guerrilla movement turned official army -- captured 29 Chinese workers after a battle with government forces.