South Sudan says it will halt oil production amid a dispute over sharing revenues with the Khartoum government.
South Sudan gained independence in July 2011, but the two states have not been able to agree on how to divide their oil wealth.
Most of the oil is produced in the south, but is exported from Port Sudan in the north.
Sudan has accused the south of not paying transport fees and said it is taking the revenues in lieu of payment.
The BBC reports the two sides are holding talks in Ethiopia to try and reach a deal.
China has urged both parties to resolve their differences.