South Sudan took 75 percent of the 500,000 barrels a day of oil production when it became independent on July 9, but only the north has a pipeline and a port to export the oil.

Last month, North Sudan halted an oil shipment from landlocked South Sudan in a dispute over customs fees.

"We are having conversations. We are looking to the alternatives," Pagan Amum, secretary general of the ruling southern Sudan People's Liberation Movement (SPLM), told Reuters at a mining industry conference.

"Meanwhile, we believe if Khartoum accepts a deal, it would be in the interests of both Khartoum and the South," Amum said, adding that he expects international mediators to encourage Khartoum to be "reasonable" in negotiations.

Experts have said southern plans to connect to a pipeline in east African neighbour Kenya are years away, but Amum indicated that an alternative through East Africa would be more economical than paying the $32 per barrel fee that Khartoum has demanded for future use of its oil facilities.

Global Arab Network

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