South Sudan faces London court case over oil-backed loan

Trading house BB Energy has filed a case against South Sudan in London for failing to deliver oil owed under a pre-payment deal, according to court filings and a company spokesperson.

One of the poorest countries in the world, South Sudan has endured two civil wars in the past 15 years and is grappling with increased debt and a shaky peace deal. In March, the government placed its petroleum minister, as well as other officials, under house arrest.

BB Energy DMCC filed the case last month, court records showed. A company spokesperson told Reuters the action was necessary to preserve BB Energy’s rights under a contract with the Ministry of Petroleum.

“As yet, they have defaulted on delivery,” the spokesperson said. “We are currently in the process of serving formal proceedings; however, we are always looking to find an amicable solution, especially considering our long-term interests in the country.”

Officials in South Sudan did not immediately respond to a request for comment on the case.

Oil trader Vitol also filed a case against South Sudan in London in May, but said it had since resolved the issue. Sources told Reuters that case related to a single cancelled oil cargo.

In May, a London court ordered South Sudan to pay Afreximbank $657 million over defaulted loans. The IMF pegged South Sudan’s total public debt at $3.7 billion as of 2023, with $550 million of the total owed to oil companies.

At its peak before the civil war, South Sudan’s crude oil production stood at 350,000 to 400,000 barrels per day, but that tumbled to just 72,000 bpd last year, according to OPEC data, after a damaged oil pipeline halted exports.

The pipeline resumed operations in June, and the country pumped 138,000 bpd that month.

Source: https://www.theeastafrican.co.ke/tea/business-tech/south-sudan-faces-london-court-case-over-oil-backed-loan-5130368