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South Africa signs an Oil Production Agreement with South Sudan

by Felix Omondi
South Africa state-owned Strategic Fuel Fund (SFF)

Here is some news, the pan-Africanism crusaders might enjoy reading about. The government of South Sudan has contracted, not the Chinese, British, or offshore government, but the South African government to manage oil production in the young nation.

The South African government will be investing in the Juba’s nascent petroleum industry, which has failed to produce any substantial oil production over the years. The South Sudan government and the South African government signed the Exploration and Production Sharing Agreement (EPSA). That will see the South Africa state-owned Strategic Fuel Fund (SFF) be granted the permission to explore oil in Block B2 area, an oilfield spreading across the Muglad basin straddling both South Sudan and Sudan.

The SFF exploration will take place over six years and any oil production undertaken will be sold in partnership with the local petroleum company Nilepet. In 2018, the South Africa Department of Energy pledged $1 billion investment into the South Sudan petroleum exploration venture.

The two countries are targetting to produce 60,000 barrel per day to be consumed in the local South Sudan market. Excess supply will be exported to neighboring countries.

South Africa’s billion-dollar South Sudan oil investment was due to kick off in 2020. However, COVID-19 put plans on hold. Then, at the end of 2021, finances began flowing to the East African nation, helping to make its oil production operations more transparent.

South Sudan has seen oil production dwindle over the last few years. But South African officials believe that capacity can rise significantly. The need for an oilfield accident lawyer in the region is likely to rise as thousands of workers descend on various sites around the country for maintenance and repairs. 

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