A memorandum signed in Moscow on 29 October paves the way for the Russian state oil company to take over Petronas's former interests in South Sudan's two main oil consortiums. An exiled opposition leader has called the deal illegal.
South Sudan has reached a preliminary agreement to transfer the former interests of Malaysia's Petronas in its two main oil operating consortiums, Dar Petroleum Operating Company (DPOC) and Greater Pioneer Operating Company (GPOC), to Russia's state-owned Zarubezhneft, Eye Radio reported, citing the Office of the President.
A memorandum of understanding and a letter of acceptance were signed at Russia's Ministry of Energy in Moscow on 29 October, on the sidelines of the third Russia–Africa summit. The meeting was co-chaired by South Sudan's Petroleum Minister Awow Daniel Chuang and Russian Energy Minister Sergey Tsivilev, with officials from the state oil company Nile Petroleum Corporation (NilePet) present. President Salva Kiir's press unit called the proposed transaction "a historic development for both countries", Radio Tamazuj reported.
The value of the deal, the final shareholdings and the timetable for completion were not disclosed. NilePet described Zarubezhneft as a suitable partner able to raise production, improve infrastructure, protect the environment and train South Sudanese workers.
Filling the Petronas gap
Petronas held a 40% interest in DPOC and 30% in GPOC before announcing its withdrawal from South Sudan in August 2024, according to Radio Tamazuj and Eye Radio. An earlier agreement to sell the assets to the British company Savannah Energy, reportedly worth about $1.25 billion, did not receive government approval and was terminated.
Opposition objections
Deng Bol Aruai Bol, chairman of the opposition South Sudan People's Liberation Movement (SSPLM), who is in exile, condemned the arrangement. "His administration must account for past revenues, accumulated debts, and obligations against future production before making further commitments," he wrote, referring to President Kiir. He argued that Article 172 of the Transitional Constitution vests petroleum ownership in the people, and called on Russia and Zarubezhneft to suspend the transaction and on the government to disclose the documents and financial terms. The SSPLM disputes the government's mandate.
Context
The deal comes as South Sudan prepares for elections scheduled for 22 December. Peace monitors have warned that the vote faces credibility risks. South Sudan's crude is exported through a pipeline across Sudan to the Bashayer terminal on the Red Sea. On 31 October a drone strike hit an oil pumping station on that pipeline at Haya in Sudan's Red Sea state, Sudan Tribune reported.
Map: Oil fields and infrastructure in Sudan and South Sudan. U.S. Energy Information Administration, via Wikimedia Commons, public domain.