For the second time in a month, Sudan and South Sudan failed to reach an agreement in Addis Ababa, Ethiopia, leading Juba to announce a shut down of oil production on Saturday. Juba and Khartoum have been embroiled in a dispute over oil revenue since South Sudan gained its independence last year.

The two sides, in the presence of their respective presidents on Friday, met for negotiations at the Inter Governmental Authority on Development's (IGAD) extra ordinary session in Addis Ababa.

Pagan Amum, South Sudan's chief negotiator said after the failed talks that his country will on Saturday complete its shut down of Pipelines: "The shut down will be complete and what will be remaining to be done the day after is finishing the cleaning and flushing of facilities"

South Sudan's move comes after Sudan seized oil shipments at Port Sudan, in the north, following claims by Khartoum that Juba had failed to settle pipeline fees.

And while South Sudan Oil Minister Stephen Dhieu Dau has suggested that Khartoum may have diverted some oil from the fields which lay on the southern side of the joint border to feed its refineries, Khartoum on the other hand has announced that it was seizing oil from South Sudan to compensate for unpaid fees.

Tensions have reached fever pitch levels after news broke out about Sudan having sold seized South Sudan crude oil at heavily discounted rates, millions of dollars below the South's official price.

They will continue their negotiation throughout the summit and even after it

The two sides have been negotiating in the past few months in Ethiopia, where they discussed issues related with border demarcation, economic affairs, mainly with the oil income and related issues.

IGAD chair, Ethiopian Prime Minister, Meles Zenawi told journalists after the meeting that the two will continue with negotiations throughout the summit in Addis Ababa.

"We don't have yet the final agreement. They will continue their negotiation throughout the summit and even after it," said Meles.

He, however, said a lot of progress was made on Thursday during the IGAD extra ordinary session, which also discussed the Somali situation.

The summit, however, dedicated most its time to finding a lasting solution to the Sudanese impasse. The two sides have been negotiating since South Sudan gained its independence from the north last July.

The leaders of the two countries, as well as the remaining IGAD heads from Djibouti, Kenya and Somalia, were attending the extraordinary ordinary session. Uganda was represented at ministerial level.

Oil revenue has been the major sticking point in Sudan and South Sudan relations, and analysts say that a successful round of talks would have ended hostilities and seen a reversal of unilateral decisions and actions by the two sides

In the past, negotiations between the two countries were mediated under the facilitation of the African Union High-Level Implementation Panel (AUHIP), under Thabo Mbeki's chairmanship.