They also called on the two parties to deescalate the current tension and to resolve their difference through negotiations.
Sudanese officials accuses Juba of attacking jointly with the Sudan Revolutionary Front (SRF) the positions of its troops inside its 1956 border stressing they both work to overthrow Khartoum's regime. Juba says it seized Heglig after air and ground attacks by the Sudanese army insides its territory.
" The African Union, urged the two parties to cease hostilities stressing it "notes with alarm the occupation of Heglig by the armed forces of the Republic of South Sudan, and calls for their immediate and unconditional withdrawal."
The spokesperson of the South Sudanese army Philip Aguer rejected on Thursday the AU call for the withdrawal of SPLA troops stressing that Heglig belongs to South Sudan.
In New York, Ban Ki-moon also issued a statement urging the both sides to "immediately to cease hostilities, remove their forces from each others' territory and avoid further bloodshed."
On Wednesday, Ki-moon held a telephone conversation with the South Sudanese President Salva Kiir to discuss the situation.
"The Secretary-General advised that before undertaking a discussion on the causes of the escalation, the immediate priority is to de-escalate the situation to avoid any further blood shed," said Martin Nesirky, the Spokesperson of Ban Ki-moon.
The UN chief also discussed the tensions between Sudan and South Sudan with US Secretary of State Clinton in Washington and spoke by telephone also the Ethiopian Prime Minister who chair the IGAD, Nesirky, added.
The UN Security Council is expected to issue a presidential statement urging the cessation of military activities and dealing with the seizure of the Heglig.