By William Madouk
Malaysian oil giant Petronas has filed a lawsuit against the government of South Sudan, accusing the government of blocking the $1.25 billion sale of its local assets in the country.
According to Petroliam Nasional Bhd (Petronas), the Juba administration has taken over the company’s operations, including its properties, instead of allowing Petronas to sell off its assets.
“Petronas International Corporation registered a case against the Republic of South Sudan on Aug. 23,” the website of The International Centre for Settlement of Investment Disputes, which is a part of the World Bank, showed.
Petronas announced in August that it may not participate in South Sudan’s upcoming oil licensing round due to challenging market conditions.
Following this announcement, the South Sudan government’s state-run Nile Petroleum took control of Petronas’ local oilfields and assets earlier this month.
The government said it would seek international partners to sustain operations and increase output at the affected blocks.
Bangasi Joseph Bakosoro, the former Minister of Presidential Affairs, confirmed that all of Petronas’ assets and shares would be transferred to South Sudan’s national energy firm, Nilepet.
Bakosoro emphasized that the government would communicate its acceptance of PETRONAS’ withdrawal through written notification to the company.
Chol Thon, the Undersecretary in the Ministry of Petroleum, also stated that Nilepet would assume the responsibilities previously held by Petronas and actively seek partnerships with other international companies to ensure the smooth continuation of operations.
Petronas Carigali Nile Limited’s presence in the South Sudan oil and gas industry is based on a joint operating company (JOC) model with interests in three JOCs which operate Block 3/7 (40 per cent), Block 1/2/4 (30 per cent), and Block 5A (67.9 per cent).
The assets include interests in 64 producing fields and 2021 average gross production of 153,200 barrels a day of oil.
Partners in the JOCs include China National Petroleum Corp, Sinopec, India’s Oil and Natural Gas Corporation Ltd, and South Sudan’s national oil company, Nilepet.
The news of Petronas’ withdrawal came on the same day that British independent energy company Savannah Energy said it was aborting a deal, made in 2022, to purchase Petronas’ assets in South Sudan for up to $1.25 billion.