South Sudan faces`worst case scenario' as Machar's forces seize control of pivotal state.

Fighting in South Sudan appeared to be heading for a "worst case scenario" yesterday with anti-government forces threatening to seize the country's oil supplies.

Rebel troops under the command of the former Vice-President, Riek Machar, said they had taken control of the federal state where most of the oil fields lie, threatening to reduce the Government to penury if supplies are cut off.

Diplomats said oil flows had so far been unaffected, but several international petroleum companies have pulled staff out and there is a risk the facilities could fall to the rebels. That would plunge the world's newest nation into an even more serious situation because Machar would effectively be able to hold the Government to ransom.

South Sudan depends on oil sales for 98 per cent of its revenue, and there is also a widespread expectation that Sudan, its neighbour and former civil-war foe to the north, would compound its problems by intervening militarily if its supplies were cut off, as the northern nation is dependent on the same oil fields for its foreign earnings.


"That is chief among the worst case scenarios, that Riek takes the oil facilities," said one Western diplomat in Juba, the capital.

Salva Kiir, South Sudan's President, who is from a rival tribe, has said that he would "sit down" for talks with Machar.

Machar yesterday said that he was in principle ready for discussions. However, his whereabouts are still not known and a bloodier clash than any seen so far seems increasingly likely.

Troops loyal to Kiir are believed to be advancing on Bor, the city seized by Machar's forces four days ago and where US military aircraft came under fire on Sunday, leaving four soldiers wounded.

President Barack Obama told Congress yesterday that he may take further military action to protect Americans in South Sudan. In a letter to Congress, Obama said that about 46 US troops were deployed on Sunday to help evacuate Americans. That's in addition to another 45 troops deployed to reinforce the US Embassy in Juba.

"I may take further action to support the security of US citizens, personnel, and property, including our Embassy, in South Sudan," Obama wrote.

A final flight evacuating remaining British citizens was due to take off from the capital Juba today. The Foreign Office said the chartered aircraft would be the last sent to help people flee, after which Britons "may have difficulty leaving in the event of a further deterioration in security".

More than 500 people have died and 65,000 have fled their homes since the fighting began eight days ago.

Kiir sacked his former deputy and several of his ministerial allies in July. Since then, Machar has been increasingly vocal in his criticisms of Kiir.

- Additional reporting AP