We have our eyes and ears on the ground and on the military side we have not seen any dramatic change in the way they conduct their warfare or seen any new equipment

Ian Lundin

"We need some type of sustainable and peaceful environment for us to look at long-term investment," Lundin's president Ian Lundin told the BBC's World Business Report.

His warning comes despite Sudan's acceptance at the weekend of US and Swiss proposals for an international ceasefire monitoring panel in the Nuba mountains.

"We would like the ceasefire extended to the rest of Sudan and the areas where we operate, otherwise we think the development is very positive," he said.

"The government has really stretched its hand out to reach a peaceful solution."

The chief international observer Norwegian Brigadier-General Jan Erik Wilhelmsen said the two-month-old ceasefire between Sudanese troops and rebels was holding despite allegations of violations.

Operations suspended

But Mr Lundin said his company could not restart its drilling and seismic activities until December, when the rain season ends, and only if the security situation allowed.

Lundin: We can help the country

"The government is fully supportive and understand our situation," said Mr Lundin adding they would not wash their hands of the country.

"We are not talking about any cut-off point. There's no reason for us to pack our bags and say enough is enough."

Lundin leads the exploration of one of Sudan's richest oil and gas fields, together with Malaysia's Petronas, Austria's OMV and Sudan's Sudapet.

OMV has also suspended exploration and said earlier this month it hoped to restart them once the situation became more favourable.

Oil revenues

Since oil production started in Sudan four years ago, it has been dogged by allegations that the government was using revenues from sales to fund the civil war.

But Mr Lundin said their presence does more good than harm.

"We think we can help the country in terms of building up the economy and reducing poverty to help the people of Sudan," he said.

"We have our eyes and ears on the ground and on the military side we have not seen any dramatic change in the way they conduct their warfare or seen any new equipment."

Rebels from the mostly Christian and animist south have been fighting for greater autonomy from the mostly Islamic north since 1983.

About two million people have died in the conflict.

An advance team of international observers are due to arrive in Sudan on 1 April to monitor the partial ceasefire in the Nuba Mountains which was signed in January.