South Sudan president, Salva Kiir Mayradit, on Tuesday told fellow heads of state at the (AU) summit that his country refused to sign a proposed deal on oil with neighboring Sudan because the deal failed to comprehensively address the fundamental causes of the crisis.

Despite the mediation of former South African President Thabo Mbeki, negotiations before independence (and since) left several unresolved issues to fester: How much the South would pay to transport oil through the North, where the actual border would lie (especially the status of the disputed region of Abyei), debt sharing, and what the citizenship status of South Sudanese remaining in the North, and vice versa, would be. In addition to tension surrounding these questions, a wider opposition that includes the three major Darfur rebel movements, the Northern arm of the Southern political movement, is growing. It is making this moment all the more precarious for Khartoum. In fact, the tangle of contestations and conflicts across the country marks the most serious challenge to the survival of Omar al-Bashir's Islamist government since it usurped power more than two decades ago.

Sudan has attributed the failure of the latest round of talks with South Sudan on oil to Juba’s “negative attitude,” accusing its southern neighbors of plotting to topple the government in Khartoum.

The government in Khartoum has requested that Petrodar, one of the JV companies responsible for South Sudan production, load 600,000 barrels of South Sudanese crude for export. Petrodar denied Khartoum’s request backing the south’s right to the crude. Petrodar said that it needed the government in South Sudan’s permission to load the crude for export.

South Sudan on Tuesday denied scrutinising rumours regarding the close links between two international oil companies, who work in the new nation, and the Sudanese government.

Total SA (FP) has agreed to begin oil exploration in the South Sudanese state of Jonglei where it holds a concession, the newly independent nation’s chief negotiator said.

Ban Ki-moon, the United Nations Secretary General on Sunday urged leaders in both Sudan and South Sudan to reach an agreement on how to share their oil wealth after series of counter accusations forced the latter to shut down its oil production.

The United States (US) permanent representative to the United Nations (UN), Susan Rice, on Monday urged the neighbouring states of Sudan and South Sudan to quickly resolve their long standing dispute over oil.

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.

The Sudanese president Omer Al-Bashir on Sunday confirmed that his country has released impounded oil shipments of South Sudan, urging acceleration of diplomatic efforts to resolve the dispute.