London Court Bars South Sudan From New Oil-Backed Prepayment Deals

(Photo Credit: Alfadil Attiya Abuanja / File)

By: Alfadil Attiya Abuanja

May 18, 2026 — LONDON/JUBA

A London court has barred the government of South Sudan from entering into new oil-backed prepayment agreements or pledging future crude cargoes as collateral for financing, in a major escalation of efforts by commodity trader BB Energy to recover a US$100 million debt.

According to a court order issued on May 15 and seen by Global Trade Review (GTR), South Sudan “must not accept any new pre-payments or enter into any arrangement that has the effect of being a pre-payment” involving cargoes of Dar Blend or Nile Blend crude oil before a further hearing scheduled for June 5.

The order also prohibits the government from taking on additional debt secured against future oil shipments.

Oil exports remain South Sudan’s main source of revenue. Over recent years, the government has relied on advance financing agreements with banks and commodity traders, pledging future oil cargoes in exchange for urgently needed cash.

However, several lenders and traders have accused the government of failing to deliver the agreed cargoes, instead selling shipments to other buyers.

In November 2025, BB Energy obtained a separate court order blocking South Sudan from selling a crude cargo scheduled for loading at a Sudanese port. The trader argued that the shipment had been designated to repay part of a US$100 million loan extended earlier that year.

The latest ruling significantly broadens the restrictions by covering all government-controlled oil cargoes.

The court warned South Sudan that failure to comply with the order could amount to contempt of court, potentially resulting in fines or seizure of assets.

The ruling also cautioned that any third party assisting South Sudan in breaching the order — including traders or financial institutions — could likewise face contempt proceedings, fines, imprisonment, or asset seizures.

A source familiar with the matter said the provision is intended to discourage other commodity traders and banks from facilitating fresh oil-backed financing arrangements with South Sudan while the dispute remains unresolved.

In a statement, a spokesperson for BB Energy said the company had already managed to reduce its exposure following a favorable court ruling obtained in November.

“Today’s order should further support the lifting of additional cargoes and accelerate the continued reduction of such outstanding amounts,” the spokesperson said.

United Nations reports indicate that although most South Sudanese oil production is exported by commercial operators, the government retains roughly one cargo per month for its own use or financing arrangements.

South Sudan has reportedly not participated in the UK court proceedings and has not appointed legal representation in the case.

The government also failed to engage in a separate lawsuit brought in 2024 by African Export-Import Bank over a US$657 million oil-backed loan.

South Sudan’s Ministry of Finance has not publicly commented on the latest court order.