Sudan, South Sudan pledge peace, seek investment

* 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 towork together to rebuild their shattered economies and not toreturn to war in a joint plea for foreign investment aftersigning a critical trade and border agreement last month.

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

"I assure you ... we are committed, both countries, not togo 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 Ethiopiaseveral agreements to end hostilities and resume key oil exportsfrom the South through Sudan after coming close to war in April.

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

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

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

The two sides have a history of signing and then notimplementing deals, making many potential investors wary ofputting money into projects like oil refineries or mineralexploration.

But the loss of foreign money after landlocked South Sudanstopped oil exports through its northern neighbour in January ina row over fees has left both economies in dire straits andpushed 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 economyimproving, the economy of Sudan will not improve.

Austria is trying to help rekindle relations between Sudanand South Sudan by hosting a conference to drum up investment inboth countries.

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

BERLIN CALLS OFF CONFERENCE

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

Karti acknowledged there was work to be done to rebuildtrust with Germany and the United States, whose embassy was alsoattacked, but expressed optimism relations with Germany wouldreturn to normal and that the conference plans could be revived.

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

Water treatment company Wabag , which already hasoperations in neighbouring Egypt, started thinking aboutextending into Sudan about two years ago, according to sales andmarketing 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 yearsuntil you really have a project. It's still a long way to go."

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

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

Juba hopes to restart oil production by the end of the yearbut may need a year or more to reach its former output of350,000 barrels a day since some infrastructure was damagedduring fighting in April.

(Reporting by Georgina Prodhan; editing by Ron Askew)

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Keywords: SUDAN SOUTH/CONFERENCE