Sudan on Wednesday suspended all negotiations with South Sudan over the disputes on oil payments following clashes along the oil rich border area. Khartoum said in a statement that it would withdraw its negotiation delegation from the African Union sponsored talks in Addis Ababas, Ethiopia and that it had ordered military mobilization.

On Tuesday, South Sudan Liberation Army launched a major operation in the Heglig, a disputed area containing an oilfield that accounts for about half of Sudan's 115,000 barrel-a-day output. The Juba administration mobilized warplanes and heavy artillery to attack the town of Tashwin. Early this month, South Sudan accused Sudan of bombing the disputed border area and announced it had shot down a Sudan warplane. These acts have broken the ceasefire agreement that the two countries signed in February and thwarted former South African President Thabo Mbeki’s compromise efforts. After the talks in Addis Ababas were cancelled, the AU task force met South Sudanese President Salva Kiir and Sudanese President Omar Al Bashir to discuss ways to ease the tension. These diplomatic efforts resulted in the resumption of senior level meetings, but fighting has dimmed hopes for peace and a solution to the conflict. The African Union has made a new proposal on politics, military, security and communication, but this proposal needs more consultation to get all warring parties involved. Meanwhile, South Sudanese negotiator Pagan Amum said the two countries were not ready for the talks and criticized the Sudanese delegation for withdrawing from the talks.

Since South Sudan seceded from Sudan and declared independence in July 2011, the two countries have wrangled over border delineation and oil interests. Sudan’s oil reserves are estimated at 6.7 billion barrels a year, making it the 3^rd largest oilfield in Africa. Oil revenues account for 68% of GDP in the north and 98% in the south.

Though the south has more large oilfields, the north controls the oil pipeline, which transports crude oil exports to the Red Sea. Under a 2005 peace agreement to end Sudan’s civil war, oil revenues are divided 50-50. But, since the South became independent, officials in the South want to replace this division with a simple payment of transport fees for using the north’s infrastructure. The South intends to build another oil pipeline to the Mombasa, Kenya in order to avoid being dependent on the North. Afraid of losing a huge income from oil exports, Sudan refused the south’s proposal.

In recent months, clashes between the Sudan army and South Sudan forces have been taking place in border areas including Kordofan, Blue Nile and Unity. The armies have mobilized warplanes, tanks and heavy artillery. The increasing tension has caused great concern among the world public. UN Secretary General Ban Ki Moon has asked the two countries to withdraw their armies and police from the disputed areas. The US has also called on both countries to show restraint and end clashes to ensure the safety and security of their people. Earlier this month, Washington provided 26 million USD for more than 140,000 refugees who have fled from Kordofan and Blue Nile.

So far, the two neighbors have not been able to find common ground.