South Sudanese and Sudanese leaders met last weekend to discuss issues left over from a 2005 peace agreement that secured the south's independence.
Pagan Amum, chief negotiator for the South Sudanese government, expressed optimism about the prospects of breaking the impasse.
"We have no problem resuming oil production through Sudan if a fair deal is reached with assurance that our oil will never be diverted by the government of Sudan to their refineries," he was quoted by the independent Sudan Tribune as saying.
South Sudan under the terms of independence secured control over much of the region's oil fields. The government in Khartoum kept control over oil transit networks.
South Sudan in January halted oil production in protest of alleged pilfering from the government in Khartoum.
Sudanese inflation is soaring in part because of the loss of oil production from the south. Khartoum was criticized for responding with force to demonstrators frustrated with the economic situation in the country.
Kate Middleton recycles dress at movie premiere
Beyonce flaunts bikini body, Blue Ivy in vacation pics