Sudan to block oil pipeline if south will not pay
Sudanese President Omar al-Bashir has threatened to shut pipelines carrying South Sudan's oil if a deal on oil is not reached before it secedes in July.
He said either the south could continue to hand over half of its oil revenue to the north, or it could pay for using the north's oil infrastructure.
Mr Bashir warned that if neither was accepted, he would block the pipeline.
Three-quarters of Sudan's oil is in the south, but most pipelines, refineries and the main port are in the north.
Southerners voted for independence in a referendum in January.'Three alternatives'
President Bashir made his threat in a speech at a rally in Port Sudan - the main oil export terminal - which was broadcast on national television.
"I give the south three alternatives for the oil," he said.
"The north is to continue getting its share, or the north gets fees for every barrel that the south sends to Port Sudan," he added.
End Quote House of Lords Committee report
The risk that the new country of South Sudan will fail as a state is high”
"If they don't accept either of these, we're going to block the pipeline."
The BBC's James Copnall in the capital, Khartoum, says oil accounts for about 98% of the south's income, so any reduction in the oil flow would be disastrous.
The government of South Sudan has floated the idea of building a new pipeline through Kenya or Uganda, but this would take several years, our correspondent adds.
Talks are continuing between northern and southern Sudan about oil and other vital pre-independence issues, including citizenship and the disputed border region of Abyei.
Last month, the northern army seized control of the disputed region of Abyei, but a deal was reached on Monday which will see it withdraw and be replaced by Ethiopian peacekeepers.Warning
A new report published by the House of Lords, the UK's upper chamber of parliament, highlights the many issues that will bedevil future Sudanese relations, including oil.
Abdullahi al-Azreg, Sudan's UK ambassador, told the committee preparing the report that Norway had been advising both sides on negotiations for the split.
"They have suggested a kind of financial transitioning in which Sudan - the predecessor state - will have 50% of the oil revenue, but this percentage will diminish to zero over six years," he said.
South Sudan's UK envoy Daniel Peter Othol said the south would consider its options, and that building an alternative pipeline through Kenya could take three years to complete.
"Some of our leaders say: 'We are not going to share the oil if the south becomes independent. We are only going to rent the pipeline,'" he said.
"Given the conditions attached to the revenue of the oil, the rent of the pipeline could be even higher. We have to see which way is better for the south to benefit from the oil."
The report - The EU and Sudan: on the Brink of Change - says that in the last six years the south has received around $11bn (£6.8bn) from its oil so far, but there is little to show for these revenues.
It also pointed to other obstacles the south will have to overcome - endemic poverty, corruption and the proliferation of weapons.
The report concludes that "the risk that the new country of South Sudan will fail as a state is high, even if the international community maintains the current levels of assistance and support".
Both Sudan and the South are reliant on their oil revenues, which account for 98% of South Sudan's budget. But the two countries cannot agree how to divide the oil wealth of the former united state. Some 75% of the oil lies in the South but all the pipelines run north. It is feared that disputes over oil could lead the two neighbours to return to war.
Although they were united for many years, the two Sudans were always very different. The great divide is visible even from space, as this Nasa satellite image shows. The northern states are a blanket of desert, broken only by the fertile Nile corridor. South Sudan is covered by green swathes of grassland, swamps and tropical forest.
Sudan's arid north is mainly home to Arabic-speaking Muslims. But in South Sudan there is no dominant culture. The Dinkas and the Nuers are the largest of more than 200 ethnic groups, each with its own languages and traditional beliefs, alongside Christianity and Islam.
The health inequalities in Sudan are illustrated by infant mortality rates. In South Sudan, one in 10 children die before their first birthday. Whereas in the more developed northern states, such as Gezira and White Nile, half of those children would be expected to survive.
The gulf in water resources between north and south is stark. In Khartoum, River Nile, and Gezira states, two-thirds of people have access to piped drinking water and pit latrines. In the south, boreholes and unprotected wells are the main drinking sources. More than 80% of southerners have no toilet facilities whatsoever.
Throughout the two Sudans, access to primary school education is strongly linked to household earnings. In the poorest parts of the south, less than 1% of children finish primary school. Whereas in the wealthier north, up to 50% of children complete primary level education.
Conflict and poverty are the main causes of food insecurity in both countries. In Sudan, many of the residents of war-affected Darfur and the border states of Blue Nile and South Kordofan, depend on food aid. The UN said about 2.8m people in South Sudan would require food aid in 2013. The northern states tend to be wealthier, more urbanised and less reliant on agriculture.