South Sudan hopes to resume oil production in September after reaching an interim agreement with Sudan on oil export fees, but it may take a year to return to full capacity, its top negotiator said on Tuesday.

The two countries agreed on Friday on how much South Sudan should pay to export its oil through northern pipelines, ending a dispute that led to the shutdown in January of South Sudan's output of 350,000 barrels per day.

The deal marked a step towards ending hostilities between the African nations, which came close to a war in April when border fighting escalated in the worst violence since South Sudan became independent a year ago.

Sudan still wants to reach an agreement on border security, however, before allowing its landlocked neighbour to export oil through its territory. Both nations need to mark their 1,800 km (1,200 miles) border, a tricky issue since much of it is disputed.

Pagan Amum, South Sudan's lead negotiator with Sudan at the African Union, said oil production would restart around September, especially in the Upper Nile state fields which contributed to much of the country's previous output.

"We're expecting to begin production immediately in September, especially for the Upper Nile oil, of Dar Blend," Amum said in an interview in South Sudan's capital.

"We expect, of course, to develop the capacity in time. It will not just be an automatic thing. It will take time to open one well after the other," he said.

"The production will begin from 150,000 (bpd)... and within three, four months, it would go to 180,000, 190,000 (bpd), and then it will go to the (old) level, and possibly higher than the time (before shutdown) within one year," he said.

Reuters