Continental Focus, International Reach

South Africa Takes Block in South Sudan

Tuesday, May 7, 2019

South Africa’s state-owned Strategic Fuel Fund (SFF) will own and operate Block B2 in South Sudan. South Africa signed an exploration and production sharing agreement (EPSA) with South Sudan for the block on May 6.

The deal will see Block B2 operated by SFF, the Ministry of Petroleum and Nilepet, the national oil company of South Sudan. This is the second EPSA signed since South Sudan gained independence in 2012.

Under this new EPSA which includes a six-year exploration period, the SFF alongside Nilepet, will launch a comprehensive aero gravity survey exploration campaign, seismic acquisition and drilling wells with great prospectivity. The SFF will also invest in capacity building initiatives, training of South Sudanese citizens, investing in social and community development projects and ensuring local content and women empowerment.

In 2018 South Africa’s Department of Energy pledged to invest $1 billion into South Sudan’s petroleum industry, with the aim of securing affordable energy supplies for South Africa. The countries are now in talks to set up a 60,000 barrel per day refinery to supply oil products to the local market in South Sudan, as well as to secure exports to Ethiopia and other neighboring countries.

The B2 area includes productive parts of the Muglad Basin and is part of the 120,000 sq km Block B which was split into three in 2012. There has been much interest in South Sudan’s Block B acreages since the entry of Oranto Petroleum to Block B3 in 2017.  Much of South Sudan’s oil and gas blocks are yet to be fully explored and resources assessed.