Sudan will not carry out a threat to shut a pipeline carrying South Sudanese oil for export, after the two sides agreed last week to ease tensions, a senior ruling party official said on Sunday.
"The pipeline will not be shut," said Rabbie Abdelatti Ebaid, of the governing National Congress.
"The two parties now agreed to stop hostilities," after a meeting last week between the South's Vice President Riek Machar and Sudanese officials, he told AFP.
In a surprise move, Sudan in early June gave oil companies 60 days to stop transporting oil from South Sudan.
The order came after President Omar al-Bashir warned the South's government in Juba over backing rebels in the north.
South Sudan denies supporting cross-border insurgents and in turn has accused Khartoum of helping rebels on southern territory.
But Ebaid said the two sides have agreed to let an African Union panel handle such complaints.
South Sudan became independent two years ago with most of the formerly united Sudan's 470,000 barrels per day of oil production, but the pipelines and the Red Sea export terminal remained in the north.