South Sudan says repulses Sudan army attack on Heglig

KHARTOUM/JUBA Sat Apr 14, 2012 9:30am EDT

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KHARTOUM/JUBA (Reuters) - South Sudan said on Saturday it had repulsed an attempt by the Sudanese army to retake a disputed oil-producing border area, extending a stand-off that has edged the two countries closer to a full-blown war.

South Sudanese troops wrested control of the Heglig oilfield from Sudan on Tuesday, prompting widespread condemnation from global powers and vows of retaliation from Khartoum.

The Sudanese army said late on Friday its forces were advancing on Heglig, vital to Sudan's economy because a field there accounted for about half of its 115,000-barrel-a-day oil output. The fighting has halted that portion of its output, officials say.

"They tried to attack our positions around 40 milesnorth of Heglig last night but it was contained," South Sudanese Information Minister Barnaba Marial Benjamin told Reuters.

"Heglig is (still) under our control," he added.

Sudanese army spokesman Al-Sawarmi Khalid did not answer his mobile phone when Reuters attempted to call him on Saturday.

The fighting has brought the former civil war foes closer to a resumption of full-blown conflict than any time since the south seceded in July, and struck a blow to Sudan's already struggling economy.

The Sudanese pound hit a historic low on the Khartoum black market as people fearing the economic fallout of the conflict rushed to convert savings into dollars, money traders said.

Sudan already had lost about three quarters of its oil output when South Sudan seceded, driving up the cost of imports and fuelling food inflation.

Landlocked South Sudan shut down its own output - about 350,000 barrels a day - in January after failing to agree how much it should pay to export crude via pipelines and other infrastructure in Sudan.

Juba now says it will withdraw from Heglig only if the United Nations deploys forces to monitor a ceasefire.

The crisis has all but killed hopes that the two countries would be able to reach a swift agreement on partition-related issues through African Union-brokered talks. Khartoum pulled out of the negotiations after the south seized Heglig.

Since the south voted for independence from Sudan last year, the two sides have failed to resolve issues including the position of the 1,800-km (1,200-mile) border, division of the national debt and status of citizens in each other's territory.

The two sides fought one of Africa's longest and deadliest civil conflicts. Some 2 million people died in the war, rooted in disputes over ideology, religion, ethnicity and oil.

(Additional reporting and writing by Alexander Dziadosz; Editing by Michael Roddy)

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