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South Africa and South Sudan Sign Oil Exploration Agreement

May 9, 2019

Department of Energy

9 May 2019

South Africa and South Sudan have signed an oil exploration and production sharing agreement.

According to an energy department statement, the deal “will see Block B2 operated by state-owned Strategic Fuel Fund (SFF), the Ministry of Petroleum and Nilepet, the national oil company of the Republic of South Sudan”.

“The B2 area includes productive parts of the Muglad Basin and is part of the 120,000 square kilometer Block B which was split into three in 2012.”

The energy department, in 2018, announced its intention to invest $1 billion into South Sudan’s petroleum industry in order to ensure affordable energy supplies for South Africa.

Talks are focused on setting up a 60,000 barrel per day refinery to supply oil products to the local market in South Sudan and to secure exports to Ethiopia and other neighbouring countries.

The agreement also includes a six-year exploration period.

According to the energy minister, Jeff Radebe, government is “bullish about this strategic and unique opportunity into Block B2 with great petroleum potential. It provides South Africa with a chance to further strengthen its energy security while entering one of the top three most lucrative onshore oil and gas markets in Africa.”