By Philip Buda Ladu
South Sudan government has approved the withdrawal of PETRONAS Carigali Nile Company Limited from the country’s oil sector.
Petronas Carigali Nile Limited (PCNL), a subsidiary of Malaysia’s state-owned energy giant Petronas, announced its withdrawal from the Republic of South Sudan as part of its long-term investment plan.
Following its announcement to quit the South Sudan oil sector after 14 years of operation, the government then sat down to evaluate the decision and issued its approval.
This follows a strategic decision made after a technical committee presented its findings and recommendations to President Salva Kiir Mayardit on Monday.
Speaking to the state media after a meeting on Monday, the former Minister of Presidential Affairs, Bangasi Joseph Bakosoro, said all assets and shares of PETRONAS will now be transferred to the South Sudan national energy firm, Nilepet.
Bakosoro emphasized that the government would communicate its acceptance of PETRONAS’ withdrawal through written notification to the company.
Meanwhile, the Undersecretary in the Ministry of Petroleum, Dr. Chol Thon, confirmed that Nilepet would assume the responsibilities previously held by Petronas.
He also mentioned that Nilepet would actively seek out partnerships with other international companies to ensure the seamless continuation of operations in the oil field.
Dr. Chol further clarified that the government’s engagement was primarily with PETRONAS Carigali Nile Company Limited (PCNL) rather than its parent company, PETRONAS International Limited.
This distinction highlights the specific focus on the subsidiary’s involvement in the South Sudanese oil sector.
On August 7, 2024, Malaysia’s state-owned energy giant, Petronas, announced the withdrawal of its operations in the young East African nation.
In a statement on its website, PCNL stated that the decision was made following a two-year period of divestment initiatives in alignment with PETRONAS’ long-term investment strategy amid the changing industry environment and accelerated energy transition.
However, PCNL hinted that it will continue to work with all relevant stakeholders to ensure an amicable transition while being mindful of the rights of its employees, in accordance with applicable laws, petroleum agreements, and PETRONAS’ policies and procedures.
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 British independent energy company Savannah Energy said it was aborting an up to US$1.25 billion deal, made in 2022, to purchase Petronas’ assets in South Sudan.