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AP
ADDIS ABABA, Ethiopia (AP) — South Sudan and Sudan could face a "major humanitarian crisis" if they fail to solve a running oil dispute, a top U.S. envoy said Sunday as African heads of state converged on Ethiopia's capital for an African Union summit.

South Sudan recently shut down oil production after it accused Sudan of stealing hundreds of millions of dollars worth of oil. Related negotiations have reached an impasse.

Both sides are acting out of desperation, taking "dramatic actions" because they fail to see prospects to reach an agreement, the U.S. special envoy to Sudan, Princeton Lyman, told The Associated Press.

Unless the two sides reach an agreement, he said, both will "suffer and suffer in not too long a period."

Lyman said the oil crisis had pushed humanitarian issues off to the side.

"It's clear that the situation is declining very rapidly," he said. "Without access for the international community we see what could emerge as a major humanitarian crisis for the continent, and a preventable crisis that the African Union has to address."

The Sudan crisis and war and hunger in Somalia are expected to dominate this year's A.U. summit, though the gathering's official theme is trade.

U.N. Secretary-General Ban Ki-moon said the oil dispute threatens peace and security in the region. He called on African leaders to "play a more important role solving regional issues."

South Sudan fought a decades-long civil war with northern neighbor Sudan, a war that culminated in a 2005 peace deal that saw the partitioning of Sudan and the birth of South Sudan last July. The new border between the two countries remains tense, with sporadic cross-border attacks taking place.

In a separate incident, China said Sunday that militants loyal to South Sudan captured 29 Chinese workers in a volatile border region of Sudan.

Oil negotiations between the two neighbors have been in a deadlock for two years. They have never agreed on the transit fees South Sudan should pay to Sudan for using its infrastructure of port and pipelines.

Ban said he discussed the issue with South Sudanese President Salva Kiir, Ethiopian Prime Minister Meles Zenawi and Kenyan President Mwai Kibaki. He urged Kiir to meet with Sudanese President Omar al-Bashir to resolve their problems.

"I am urging two leaders to demonstrate political will," he said.

Lyman said fighting in South Kordofan and Blue Nile has ended most communications between the two and increased distrust.

Lyman and Ban expressed concerns about a humanitarian crisis along Sudan's volatile border with the south, and said the Khartoum government was not cooperating with U.N. missions.

"I am deeply concerned about South Kordofan and Blue Nile State," Ban said. "Very worrisome because of the accessibility. There is no access for humanitarian workers."

The U.N. has also expressed humanitarian concerns in South Sudan, where more than 120,000 people need aid because of a wave of ethnic clashes in a remote and volatile region.

The two nations have been meeting in Ethiopia for oil talks. Haile Menkerios, a special U.N. representative to Sudan, said Sunday there has been no recent progress.

Also on Sunday, South Sudan's minister of petroleum and mining said the nation will not restart oil production unless Sudan accepts a list of demands.

Stephen Dhieu Dau said South Sudan was "committed to negotiations" but that Khartoum would have to accept their offer of paying $1 per barrel for using Sudan's pipelines for export and $2.4 billion dollar financial assistance package before South Sudan turns on production again.

He also said Sudan must withdraw troops from the disputed border region of Abyei and stop funding rebel groups in South Sudan. He said South Sudan wants an international treaty guaranteed by "international superpowers."