* South Sudan to complain to UN about pipeline bombing
* Sudan denies responsibility, says not in its interest
* Oil transport row could escalate into bigger conflict
* Both sides in talks to resolve oil dispute
By Hereward Holland
EL NAR OIL FIELD, South Sudan, March 6 At
an oil well in South Sudan, Mohamed Lino clambered into a
metre-deep (3-ft) crater as crude oozed out of shrapnel-damaged
pipes, the wreckage of what the government said was an air
attack by its old enemy the north.
"This is where the bomb fell ... If the oil had been flowing
there would have been big, big damage," said Lino, director
general of South Sudan's oil ministry, examining the churned
earth beneath his feet.
Last week's bombing, for which Sudan denies responsibility,
raised the stakes in a bitter row over oil transportation fees
that analysts say could escalate into full-scale war.
South Sudan declared independence last year after voting
overwhelmingly for secession in a referendum, part of a 2005
peace deal to end decades of civil war. But the peace remains
uneasy at best, with north and south accusing each other of
waging proxy wars in states along their ill-defined frontier.
The northern government, which relies heavily on revenues
from southern oil piped through its territory, denied bombing
the well that sits just 10 km (6 miles) from the border.
Officials in the south said the air strike on El Nar set a
precedent by targeting energy infrastructure and described it as
a dangerous escalation.
"They bombed this place because of the oil," said Miakol
Lual, the traditional chief of El Nar, who said the planes came
from the northeast and flew off in the same direction.
At another bomb site shown to reporters, Lino picked over a
pile of grey bomb fragments, looking for markings that might
suggest its origin, without success.
"Sudan did not bomb any territory in South Sudan," said
Rabie Abdelaty, an information ministry official in Khartoum.
"There's no reason for Sudan to attack oil equipment or wells.
Sudan has interests in this oil because it normally flows
through our pipeline. We didn't do this."
South Sudan's government said it would file a complaint to
the United Nations Security Council accusing Sudanese warplanes
of dropping at least three bombs on the El Nar field on Feb. 29.
North and south separated without agreeing how much the
landlocked South, which inherited most of the pre-split Sudan's
known oil reserves, should pay to use oil pipelines, processing
facilities and a port in the north.
"It is a very dangerous game because Sudan's (only) oil
field is not that far from where they dropped the bomb. If the
South decides to retaliate then the two countries will lose,"
said Chom Juaj, vice president of Greater Nile Petroleum
Operating Company, which operates the fields in South Sudan's
He said the bombing was designed as a demonstration of the
north's power and military reach.
The two armies skirmished on the border at the end of 2011.
Analysts say neither side has the appetite or the money to
return to full-scale war but, with no oil currently flowing, one
disincentive for head-on conflict has gone.
South Sudan's government in Juba shut down its 350,000
barrel-per-day oil production in January after the north seized
over $800 million of the south's oil and built a tie-in pipeline
to divert it through refineries in Khartoum.
The two governments met in Ethiopia on Tuesday to try to
break the deadlock over oil transit fees.
The South is offering less than $1 per barrel while Sudan
wants $6 plus a renegotiation of pipeline and processing fees
which would push costs to $36 per barrel.
Samson Wassara, a political science professor at Juba
University, said all-out war was still unlikely and that the
bombing may have been intended as a message just days before the
"Khartoum is sending a signal saying 'if you divert the oil
and we do not benefit from anything then we can destroy that oil
and create instability so that you don't enjoy the benefits of
that oil,'" Wassara said.
The bombing also came two days before a groundbreaking
ceremony for Lamu port in Kenya, which South Sudan hopes to use
to export crude once it has built a new southern pipeline.
The new pipeline, which the south believes it can build in
11 months, would divert oil that previously flowed to the north
and leave Sudan with a pipeline that has not yet paid for
"It's most likely that the added mistrust and tension
(caused by the bombing) will just strengthen Juba's resolve to
build alternative export routes," said Dana Wilkins, researcher
at campaign group Global Witness.
(Additional reporting by Khaled Abdelaziz; Editing by Andrew
Heavens and Robin Pomeroy)