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Profit-sharing agreement of oil revenues reached by two Sudans, says AU mediator Thabo Mbeki.
Khartoum says it wants to agree on border security first before discussing any oil or financial deal.
Both countries vow to cease hostilities, but fail to sign agreement, ahead of South Sudan's independence celebrations.
Admission comes after foreign ministry denied security presence in the region and UN called for Sudan's withdrawal.
Negotiators meet in Addis Ababa amid fresh exchange of allegations and a Sudanese troop pullout from contested region.
South Sudan says it retains control of key town in the oil-producing border region despite ongoing attacks from Sudan.
South Sudanese military says Heglig still under its control after overnight clashes and despite Sudanese air raids.
Spokesman for Khartoum says troops have reached outskirts of Heglig, occupied by South Sudan in cross-border clashes.
Officials from Sudan and South Sudan travel to Addis Ababa, but await arrival of African Union mediator Thabo Mbeki.
Officials from Sudan and South Sudan to meet in Addis Ababa on Thursday with view to ending hostilities along border.
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