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Meet South Sudan’s Oil Investors

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Read about South Sudan’s growing oil sector and more in the Africa Energy Series Special Report: South Sudan 2020 – the leading investor resource for tracking South Sudan’s current and future movements within the sector. Download the extended report and other AES Special Reports here.

The most recent Exploration and Production Sharing Agreement signed in South Sudan since independence saw South Africa’s Strategic Fuel Fund (SFF) – which acquires, maintains, monitors and manages the country’s strategic energy feedstocks and carriers –take over as operator of block B2, in partnership with Nile Petroleum. A subsidiary of the Central Energy Fund, the company is tasked with finding prospective sources to respond to South Africa’s energy needs and sees the investment in South Sudan as strategic to those objectives.

Meet South Sudan's Oil Investors 1

Block B2 is also part of the former block B, neighboring Oranto’s acreage, and includes productive parts of the Muglad Basin. The SFF is likely to look for further partners to explore the acreage and reduce its risk exposure. The company’s entry in South Sudan follows a pledge made in 2018 by the South African Department of Mineral Resources and Energy to invest up to $1 billion in South Sudan’s oil industry and will also include the construction of a 60,000 barrel per day refinery. In June 2019, the SFF submitted a Request for Proposal for a service provider to conduct a pre-feasibility and feasibility study for the oil refinery project, in a clear demonstration of its commitment to South Sudan’s energy sector.

In March 2017, Oranto made history by signing the first Exploration and Production Sharing Agreement in South Sudan since 2011, effectively becoming the first oil contract signed since independence. Africa’s largest privately held, Africa-focused exploration and production group acquired a 90% interest in block B3, with the other 10% being held by Nile Petroleum.

Meet South Sudan's Oil Investors 3

The block is part of the Cretaceous rift basin system and was originally part of a much larger 120,000 km2 license named Block B, which was split into three separate licenses. Oranto has stated its willingness to work together with any future operators of neighboring blocks 1 and 2 to find the most efficient solutions to explore the asset. It is considered a low-risk high reward acreage and the company has committed to invest $500 million on the exploration campaign.

The exploration period is divided into three periods of three years, two years and a single year, with the latter two being optional. The first stage includes acquiring airborne geophysical surveys, acquiring and processing 2D seismic and assessing existing data, while both optional stages include drilling commitments. Besides South Sudan, Oranto has exploration interests in Benin, Ghana, Liberia, Namibia, São Tomé and Príncipe, Senegal, Uganda and Zambia, and producing assets in Nigeria and Equatorial Guinea. In South Sudan, besides its exploratory work, it has partnered with the government to support the country’s education system and, in 2019, financed educational programs to provide training for 25 teachers in the most underprivileged parts of the country.

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Sihle Qekeleshe is a Web Editor at Energy Capital & Power. She has experience as a Copywriter and Editor in various industries.