By Khalid Abdelaziz and Hereward Holland
KHARTOUM/JUBA (Reuters) - Sudan and South Sudan on Saturday failed to agree on how to withdraw armies from their disputed border after a round of talks in Ethiopia, delaying again the resumption of crucial oil exports.
The African neighbors came close to war in April in the worst border clashes since South Sudan seceded from Sudan in 2011 under a 2005 deal which ended decades of civil war.
After mediation from the African Union, both countries agreed in September to set up a demilitarized buffer zone and resume oil exports from landlocked South Sudan through Sudan. Oil is vital to both economies.
But neither side withdrew its army from the 2,000-km (1,200-mile) border due to mistrust left from one of Africa's longest civil wars.
To end the stalemate the AU brought together Sudan's President Omar Hassan al-Bashir and South Sudan's Salva Kiir two weeks ago in Ethiopia. But after a week of talks in Addis Ababa to discuss how to set up the buffer zone, as agreed by the presidents, both sides accused each other of making new demands.
"We were facing difficulties during the talks in Addis Ababa because of the changing position of South Sudan which keeps altering every time we reach an agreement," Sudan's defense minister Abdel-Rahim Mohammed Hussein told reporters after his return at Khartoum airport.
Talks would be postponed until February 13, he said.
Hussein said South Sudan made new demands for demilitarization of a disputed border area called Mile-14 and had not given up support for rebels fighting Sudan's government.
Khartoum accuses Juba of backing Sudan People's Liberation Movement-North (SPLM-North) rebels in South Kordofan and Blue Nile, two Sudan states bordering the South. Juba denies this.
The SPLM-North, made up of fighters who sided with the South during the civil war, controls part of the Sudan side of the border, which complicates setting up the buffer zone.
South Sudan accused Sudan of refusing to withdraw its forces from the border and making new demands regarding "Mile-14".
"The Republic of South Sudan also agreed to resume oil production immediately ... (but) Sudan has refused to accept the oil for processing and transporting in Sudan," until the buffer zone was fully operational, South Sudan said in a statement.
South Sudan, which says Sudan often bombs its territory, shut down its entire oil output of 350,000 barrels per day (bpd) a year ago after failing to agree export and transit fees with Khartoum. It had hoped to be producing 230,000 bpd by December.
Crude from southern fields will take two months to reach the Red Sea terminal on Sudan's coast after output resumes, South Sudan said this month, suggesting exports are unlikely to hit markets until April or even May after the latest delay.
The AU had planned to publish last week a timetable for setting up the buffer zone.
But in a statement on Saturday it only said both sides had made "substantial progress" and would hold further talks regarding the buffer zone and "the key issue on when oil exports could resume and under what circumstances."
It did not say when talks would resume.
Apart from oil and the buffer zone, the two countries must also agree on ownership of Abyei and other disputed areas.
On Thursday, Juba had raised hope of an understanding when it said it had started withdrawing its army from the border.
But it was unclear whether Juba had actually begun pulling out its forces because its military spokesman Philip Aguer told Reuters the army was still awaiting orders to do so.
(additional reporting by Aaron Maasho in Addis Ababa; Writing by Ulf Laessing; Editing by Jason Webb)
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