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President Salva Kiir accuses his Sudanese counterpart of "mobilising for war" after Bashir threatened to cut oil flow.
Agreement ends 15-month row with Sudan and means both countries will receive billions of dollars in revenues.
Dispute between former enemies seen as major threat to peace in Africa as both sides are seen acting out of desperation.
Khartoum says it will release detained tankers in goodwill effort to end spat with South Sudan over oil payments.
Juba accuses Khartoum of "stealing" its oil exports as AU sponsored talks are set to open in Addis Ababa.
Featured on Al Jazeera
An innovative rehabilitation programme offers Danish fighters in Syria an escape route and help without prosecution.
Street tension between radical Muslims and Holland's hard right rises, as Islamic State anxiety grows.
Take an immersive look at the challenges facing the war-torn country as US troops begin their withdrawal.
Ministers and MPs caught on camera sleeping through important speeches have sparked criticism that they are not working.
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