The widely reported multi-billion oil deal that embarked upon by minister of energy Jeff Radebe has been successful.
An exploration and production sharing agreement has been signed between South Sudan and South Africa’s Strategic Fuel Fund.
This is line with the Sunday Times reporting on proposed deals with South Sudan. On Sunday, the paper reported that energy minister Jeff Radebe was keen to finalise the R14.5bn deal with the war-ravaged country on the eve of SA’s elections.
The Sunday Times previously reported how Radebe pushed for SA to invest in building an oil refinery and exploring a new oil block in South Sudan. This was done in spite of Radebe having been advised against the investment by the state’s Central Energy Fund. Radebe insisted that the project would go ahead only after a full feasibility study had been concluded, according to the publication.
In a statement issued from Juba on Monday, the African Energy Chamber said: “This is the second petroleum exploration agreement that South Sudan has signed since independence. Singing this deal with South Africa’s state-owned company marks the emergence of a strong intra-African energy cooperation and signals the willingness by South Sudan to provide investors with an enabling environment to invest and do business in the country.”
NJ Ayuk, CEO of Centurion Law Group and the chamber’s executive chairman, said: “This is a brilliant deal and the future outlook for exploration in South Sudan and Block B is huge, with prospective resources into the billions of barrels of oil. The potential discoveries can be quickly and cheaply tied into existing infrastructure.”
The chamber said the potential for large discoveries of oil and gas is immense in South Sudan, which remains largely under-explored despite already having proved oil reserves of 3.5bn barrels.
“New entrants like the Strategic Fuel Fund are key to ensuring socio-economic development in South Sudan and show the way for more investors to come.”
South Sudan is expecting to produce close to 270,000 barrels of oil per day by the end of this year and is seeking investment across its value chain, said the chamber.