By Charles Lotara, SSMJ Juba, Friday (September 20, 2024) – Less than two months after Petronas shut down operations in East Africa, London-based Wildcat Petroleum partnered with South Sudan's Nile Petroleum Corporation (Nilepet) to acquire its assets. After 24 years of oil extraction, PETRONAS withdrew from South Sudan on August 7, 2024, following a two-year divestment initiative in alignment with its long-term investment strategy amid the changing industry environment and accelerated ene
By Charles Lotara, SSMJ
Juba, Friday (September 20, 2024) – Less than two months after Petronas shut down operations in East Africa, London-based Wildcat Petroleum partnered with South Sudan's Nile Petroleum Corporation (Nilepet) to acquire its assets.
After 24 years of oil extraction, PETRONAS withdrew from South Sudan on August 7, 2024, following a two-year divestment initiative in alignment with its long-term investment strategy amid the changing industry environment and accelerated energy transition.
During its operations in the country, the company held stakes in six oil-producing blocks (Blocks 1, 2, 3, 4, 5A, and 7) on a joint operating company model with working interest stakes ranging from 30% to 67.8%.
On 19 August 2024, Nilepet stated it would assume all assets and responsibilities held by PETRONAS. Following the completion of the acquisition, Nilepet pledged to establish partnerships with other international companies to sustain operations and boost output.
This week, Europe-based publication MarketScreener reported that Wildcat Petroleum, a London Stock Exchange-listed firm, emerged as a partner after signing the MoU with Nilepet.
Under the terms of the MoU, representatives from Nilepet and Wildcat will establish a working party to exchange information and collaborate on a mutually beneficial agreement that aims to sustain and increase overall oil production across the PETRONAS Assets. Both parties can mutually consent to extend the MOU beyond its six-month validity.
In May 2024, Wildcat and the Ministry of Petroleum signed the first Memorandum of Understanding to establish a collaboration agreement to form a Production Sharing Service Agreement (PSSA) between the two institutions to work together to advance the development and commercial exploitation of the hydrocarbon assets in selected fields in South Sudan.
Members of both WCAT and MOP will establish a working party under the agreement to select suitable fields for development and agree on suitable terms and conditions.
The MoU is valid until 31/5/2028 and recognizes the current status of existing exploration and production contracts in South Sudan, including pre-emption rights.
Following significant reshuffles by President Salva Kiir at the ministry and Nilepet in July this year, Wildcat reiterated that the working relationship with the government remained cordial.
“Last Wednesday (10 th July 2024), President Kiir of South Sudan issued a number of presidential decrees, two of which affected the Ministry of Petroleum (MOP). The current Undersecretary, Dr. Deng, was replaced by Dr. Thon; and Dr. Lino was made the new CEO [Managing Director] of the state oil company Nilepet. The Wildcat team has a relationship with both individuals stretching back decades, and the company envisages that these changes will not affect Wildcat plans in South Sudan,” it says.
“Separately, Wildcat was invited by the MOP to attend celebrations (on 15th July 2024) to mark the new appointments, and as far as the company understands, Wildcat was the only oil company at the celebrations."
Meanwhile, PETRONAS has filed a claim with the International Centre for the Settlement Investment Dispute (ICSID) against the South Sudan government after the company accused Juba of blocking London AIM-listed Savannah Energy from buying its upstream assets for $1.25bn.
In November 2023, former Minister of Finance and Planning Dr. Bak Barnaba Chol announced that the government had finalized a $3 billion partnership deal with Caltech Group.
The deal allowed the company to purchase and take over PETRONAS's assets and shares after the firm withdrew from the Exploration and Production Sharing Agreement in August 2022.
Consequently, Savannah Energy, which had made a longstanding PETRONAS asset acquisition bid a few months after a fallout with the Chadian government, halted the deal .
This phenomenon left the Malaysian company with very little to take after finalizing its exit from South Sudan’s oil industry. It remains to be seen if its arbitration claim will yield a positive outcome.