South Sudan accused Sudan of blocking 3.4 million barrels of its oil exports and said the northern neighbor is also seeking to divert the flow of some of its crude by building a new pipeline.

The government of South Sudan (GoSS) on Thursday threatened to sue Khartoum over its decision announced this week to unilaterally impose monthly charges on its crude oil transported through its pipelines.

Part of an oil field in South Sudan’s oil-rich Unity State caught fire on Wednesday causing a decline in production, according to local officials.

Sudan and South Sudan are due to enter a new round of negotiations aimed at resolving their dispute over oil in mid-January, AU mediators have announced.

China is sending its special envoy for African affairs, Liu Guijin, to help push oil negotiations over between Sudan and newly independent South Sudan.

Sudan's government denied it's blocking two South Sudanese oil shipments through its pipeline and said it was confident of defending any legal action taken by its southern neighbor over the dispute.

South Sudan warned all foreign oil companies, the oil consortia and pipeline operators in the country not to cooperate with Sudan on crude oil-related matters, unless authorized.
The directive was contained in a press release issued by the South Sudan’s petroleum and mining ministry following reports of Sudan’s apparent intention to confiscate 23% of the south’s entitlement oil allegedly as payment in kind for pipeline and transit fees.

Sudan on Wednesday denied it had halted landlocked South Sudan's oil exports in a transit fee row, but said the country had confiscated crude shipments to make up for payments it claims South Sudan owes.

The South Sudan government on Wednesday reacted negatively to reports that Sudan plans to take 23% of the new country’s oil exports, saying it will consider suspending oil production if north Sudan continues to impose high transportation and refinery costs.

China, a major buyer of oil from Sudan and South Sudan, urged the two governments on Tuesday to end a dispute over transit fees that led Sudan to halt the landlocked South's oil exports.