Disputes over oil sharing between Sudan and South Sudan prompted the government in the south to cut oil output, the government in Juba said.
The government in South Sudan said it was forced to cut oil output in half in retaliation for a move by the north to sell $815 million worth of oil without providing compensation to its southern neighbor.
"The government of South Sudan is making good progress with the shutdown of all oil wells in its producing fields," the Financial Times quoted the government as saying.
The decision gives Sudan only a short time to clear out viscous oil from one of the two pipelines running from the south before it solidifies, the newspaper adds.
South Sudan produces around 350,000 barrels of oil per day though much of that is refined and exported through Sudan's infrastructure. The Chinese government buys 5 percent of its oil from both countries but is exploring alternatives.
South Sudan became an independent nation in July as part of a comprehensive peace agreement reached in 2005. Issues like border conflicts and disputes over oil threaten to unravel the peace deal.
South Sudan gets nearly all of its revenue from oil.