South Sudan, South Africa Sign Oil Deal

The Government of South Sudan and South Africa have signed an oil production agreement, the Exploration and Production Sharing agreement (EPSA). The deal follows a pledge made last year that South Africa would invest $1 billion in South Sudan’s petroleum industry. 

Under the deal South Africa’s Strategic Fuel Fund (SFF) has secured permission to explore for oil in Block B2 over a period of six years. The SFF will also enter a joint venture with local firm Nilepet.

Talks are also underway concerning the establishment of a refinery to process 60,000 barrels daily for both the local market and export.

South Sudan is estimated to have the third-largest oil reserves in sub-Saharan Africa, but just 30 per cent of the country has been explored. Conflict has been a constraint on production, reducing volumes from a peak of 350,000 barrels per day to less than 150,000 at one point.

Speaking on the deal South African Minister for Energy Jeff Radebe is quoted as stating, "We are bullish about this strategic opportunity into Block B2. 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. Investment is key to guaranteeing the economic progress of South Sudan."