British oil firm to acquire Petronas assets for over $1.2 billion

A British energy company – Savannah Energy – is set to purchase assets of Petronas in South Sudan in a deal worth up to $1.25 billion, several media reports show.

The move comes a year after the Malaysian firm, which began oil production in the then region in 1999, said it would not renew oil licensing round over “challenging market conditions”.

Earlier, the Minster of Petroleum had told foreign oil investors to adhere to the 2018 national content policy should they want to continue operating in the country.

The policy provides for the procurement of goods and services produced in South Sudan, employment and training of South Sudanese, and transfer of skills, knowledge, competence, and technical know-how.

Anyway, through the deal, Savannah Energy gains interests in three joint operating companies (JOCs) that operate Block 3/7, Block 1/2/4, and Block 5A.

In Block 3/7 and Block 1/2/4, the British firm will reportedly get stakes of 40% and 30%, respectively, and in Block 5A, it will get a stake of 67.9%. The assets involved in the deal include interests in 64 producing fields.

According to Savannah Energy, the 2021 production of the assets was an average gross 153.2 thousand barrels of oil per day (Kbopd).

The closing of the deal is subject to the approval of the South Sudan government, the approval of Savannah Energy’s shareholders, and other preceding conditions.

Major partners in the joint operating companies are CNPC, ONGC, Sinopec, and Nilepet, the South Sudanese national oil firm.

But a report released in 2010 – Unpiad Debt, accuses Lundin Energy, Petronas, and OMV of being complicit in international crimes committed in South Sudan between 1997-2003.

The start of oil exploitation set off a vicious war in the area. Between 1997 and 2003, international crimes were committed on a large scale in what was essentially a military campaign by the Government of Sudan to secure and take control of the oil fields in Block 5A.

As documented in the report, they included indiscriminate attacks and intentional targeting of civilians, burning of shelters, village, destruction of objects necessary for survival, unlawful killing of civilians, rape of women, abduction of children, torture, and forced displacement.

Thousands of people died and almost two hundred thousand were violently displaced. Satellite pictures taken between 1994 and 2003 show that the Lundin Consortium’s activities in Block 5A coincided with a spectacular drop in agricultural land use.

The accusations thrown at Petronas and the other companies include: Building infrastructure like base camps, air strips and an all-weather road which were used by the Sudan Armed Forces to raid villages; providing the Sudanese government with military vehicles; paying the Sudan Armed Forces and other military organizations to protect their oil fields.

In November 2021, Swedish prosecutors brought charges against the chairman and former CEO of Lundin Energy, arguing that the company had asked the Sudanese government to secure a potential oilfield, knowing this would mean seizing the area by force.

This made the executives complicit in war crimes that were then carried out by the Sudanese army and allied militia against civilians.