Uncertainty over the production and export of oil from India’s state-owned ONGC Videsh’s (OVL) oil field in South Sudan continued after Sudanese President Omar al Bashir accused South Sudan of supporting rebels, and threatened to halt cross-border oil flows.

President Bashir made these allegations at a public function in Sudan on Saturday, accusing South Sudan of supporting the anti-government Sudanese Revolutionary Front that carried out attacks in central Sudan in April.

OVL is one of three major companies invested in land-locked South Sudan’s oilfields, and is dependent on Sudan’s oil processing and export facilities.

The two countries resumed oil flows earlier this year after an 18-month hiatus amid disagreements over borders and allegations of fostering instability in each other’s territories. Since then, the two countries have signed nine agreements in an attempt to restart the economies of the two inter-dependent nations.

On Monday, South Sudan said it was continuing to produce and export oil to its northern counterpart as it had not received official intimation of the stoppage of oil exports. In Khartoum, Sudan’s Oil Minister said that Sudan would wait 60 days before taking further action, suggesting that a negotiation was still possible.

In the South Sudanese capital at Juba, President Salva Kiir denied the allegations of his northern counterpart. “President Bashir is declaring war indirectly without saying it,” President Kiir told reporters. “We are not for war.” President Kiir also accused the north of supporting rebels in South Sudan’s Jonglei state. In April, five Indian soldiers, deployed as UN peacekeepers, were killed when rebels ambushed their convoy in Jonglei.

“This situation has arisen because we have not yet succeeded to establish a demilitarised zone,” said Ramtane Lamamra, Commissioner for Peace and Security of the African Union, at a press conference in Addis Ababa on Tuesday, referring to the 20 km-wide buffer zone that both countries have agreed to, but are yet to implement.

Ambassador Lamamra noted that the 60-day period gave both sides time to arrive at a negotiated solution, and said that former South African President and Head of the AU High Level Implementation Panel, Thabo Mbeki, had proposed a solution in a letter sent to the presidents of both countries.

“An oil shutdown would have serious consequences for the viability of the two states, relations between them and the wider region,” said a spokesperson for Catherine Ashton, the European Union’s foreign policy chief, in an e-mailed statement, and urged that both sides honour all signed agreements.

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