Continental Focus, International Reach

South Sudan Oil Conference Fails to Attract

Thursday, October 12, 2017

South Sudan’s first international oil conference did not garner a whole lot of participation from major players in the industry. Infact, it did not even garner participation from the country’s president, SalvaKiir. The country had been hoping to attract prospective investors from large international firms, but they failed to show.

Given the security situation in South Sudan it was not surprising that there was an absence of large firms, replacing them however were the smaller firms that are more willing to take a risky bet in the hunt for big rewards.

The country’s current production flows are produced by Indian and Asian state-run firms such as CNPC and ONGC. France’s Total holds one of the country’s largest swathes of exploration acreage but has not made much of an effort to launch an exploration campaign and was noticeably absent from the event.

“The elephant in the room is still the crisis,” said NJ Ayuk, chief executive of Centurion Law Group, an African energy-focused firm, cited in a Reuters report. Ayuk spoke of South Sudan when it gained independence saying, “Everybody was in love with South Sudan, everybody was hopeful and wanted to help,” he said of prospective investors. “The challenge is bringing the country back to where it was in 2011, where most people could really see a dream.”

It is not only the security challenges that could keep firms out of South Sudan, the government’s terms are a tad too stringent given the complete lack of any new investment over the past several years. The country’s petroleum minister, Ezekiel Lol Gatkuoth, was not subtle in delivering the government’s position saying that “government would assert itself in talks with potential investors.”

“I’m not threatening anybody, but if you don’t meet our terms, we will say ‘bye bye’ and then somebody else will come in immediately,” Gatkuoth said. He said state-owned Nilepet would take a greater role in partnerships. “You will team up with Nilepet,” he told the conference, with a caveat: “I’m not encouraging you to leave ­– immediately.”

This is not a reassuring message, Andrew Firth of Secure, a regional private security and risk management firm was quoted by Reuters as saying.

“The quickest way to drive the petroleum sector forward is by allowing the market to drive development, not for the government to drive (it).”