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Sudan, South Sudan pledge peace, seek investment

Wednesday, 10 Oct 2012 | 11:06 AM ET

* Rare chance for Sudan to meet Western firms

* Germany conference called off after embassy riot

* Sudan and South came close to war in April

By Georgina Prodhan

VIENNA, Oct 10 (Reuters) - Sudan and South Sudan pledged to work together to rebuild their shattered economies and not to return to war in a joint plea for foreign investment after signing a critical trade and border agreement last month.

In their first high-profile appearance together since signing the deals, ministers from the two countries told an investment conference in Vienna they would work to make peace.

"I assure you ... we are committed, both countries, not to go back to war. We are committed to talk and talk and talk," Sudanese Foreign Minister Ali Ahmed Karti said.

The African neighbours signed two weeks ago in Ethiopia several agreements to end hostilities and resume key oil exports from the South through Sudan after coming close to war in April.

Both countries have yet to sort out other conflicts left over from South Sudan's messy secession last year such as deciding the fate of Abyei and other border regions.

Separately on Wednesday, insurgents said they had shelled the main city in Sudan's oil-producing South Kordofan state, the second attack on the city this week.

Fighting in South Kordofan has forced hundreds of thousands to flee their homes and added to tensions between Sudan and South Sudan, former enemies in a civil war that ended in 2005.

The two sides have a history of signing and then not implementing deals, making many potential investors wary of putting money into projects like oil refineries or mineral exploration.

But the loss of foreign money after landlocked South Sudan stopped oil exports through its northern neighbour in January in a row over fees has left both economies in dire straits and pushed them to scramble to replace the lost revenues.

"The shutting off of the oil, it didn't help either of us," South Sudan's deputy minister for international cooperation, Elias Wakoson, told the conference. "Without our economy improving, the economy of Sudan will not improve.

Austria is trying to help rekindle relations between Sudan and South Sudan by hosting a conference to drum up investment in both countries.

The forum is a rare opportunity especially for Sudan to get in touch with Western firms which mostly shun the Arab African country due to U.S. trade sanctions in place over Khartoum's human rights record and past role hosting militants.

BERLIN CALLS OFF CONFERENCE

A similar investment conference was due to have been held this month in Europe's biggest economy, Germany, but was called off by Berlin after the German embassy in Khartoum was stormed in protests against a U.S. film insulting the Prophet Mohammed.

Karti acknowledged there was work to be done to rebuild trust with Germany and the United States, whose embassy was also attacked, but expressed optimism relations with Germany would return to normal and that the conference plans could be revived.

No concrete agreements to invest in Sudan or South Sudan were announced at the Vienna conference, but some delegates said they were actively considering the idea.

Water treatment company Wabag , which already has operations in neighbouring Egypt, started thinking about extending into Sudan about two years ago, according to sales and marketing director Daniel Pineda.

"Our Egyptian colleagues said let's look at it and we said: Why not?" Pineda told Reuters. "But it could take five years until you really have a project. It's still a long way to go."

"In the end, what is most important is that they stick to what they have said in their documents."

Austrian energy group OMV , which sold its remaining Sudanese oil interests in 2004, said on Wednesday it had no current plans to re-enter the market.

Juba hopes to restart oil production by the end of the year but may need a year or more to reach its former output of 350,000 barrels a day since some infrastructure was damaged during fighting in April.

(Reporting by Georgina Prodhan; editing by Ron Askew)

((georgina.prodhan@thomsonreuters.com)(+431 5311 2256)(Reuters Messaging: georgina.prodhan.thomsonreuters.com@reuters.net))

Keywords: SUDAN SOUTH/CONFERENCE