Sudan Threatens To Close Pipeline

The Sudanese government said Tuesday it would no longer negotiate with rebels it accuses South Sudan of backing, and threatened to close the pipeline carrying crude-oil shipments from its landlocked neighbor.

The decision is a significant setback for the African Union-led efforts to end a conflict that has displaced tens of thousands of people in the past two years.

It comes as Sudan's army recaptured a key town from the rebels in the oil-producing South Kordofan state, after days of heavy clashes that underscore the tense situation between the two countries.

"The message from the president [Omar al-Bashir] is that we cannot continue talking to people who are terrorizing citizens," said government spokesman Rabie Abdelaty. Mr. Bashir also told state news agency SUNA that Sudan would close the pipeline carrying oil shipments from the south if South Sudan continues to support the rebels operating in the states of South Kordofan, Blue Nile and Darfur on Sudan's southern border.

South Sudan pumps its crude to port Sudan through two pipelines from its Unity and Upper Nile states. The pipelines are vital to the two nation's economies, which are struggling to recover from the lost revenue following a 15-month oil-production shutdown.

Sudan in late 2011 confiscated South Sudanese crude valued at $815 million, prompting Juba to close its entire 350,000-barrels-a-day of production.

Barnaba Benjamin, South Sudan's information minister, said his government is ready to negotiate with Khartoum over the standoff, but added that his government "has nothing to do" with rebels in Sudan. "We are committed to the implementation of the peace agreements and we urge Sudan to follow suit, closing the pipelines will not help at all."

Copyright (c) 2012 Dow Jones & Company, Inc.

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