Juba, Monday, April 24, 2017 – Representing the Government of South Sudan,
the Ministry of Petroleum announces that it is welcoming the interest of
investors for direct negotiations on oil and gas in blocks B1 and B2. The
announcement comes after negotiations broke down with the French oil and
gas company Total E & P due to irreconcilable differences.
Officials of the Ministry of Petroleum met with representatives of Total
in Kampala, Uganda in the past two weeks. Also involved in the
negotiations to develop an exploration and production sharing agreement
(EPSA) for the blocks (B1 & B2) were UK independent Tullow Oil Private
Limited Company and the Kuwait Foreign Petroleum Exploration Company
(KUFPEC). The negotiations reached an impasse over the proposed
exploration period and cost recovery limit.
“Following lengthy discussions with representatives of the company Total
we have decided it is in the best interest of South Sudan to open
opportunities to other potential investors,” said Ezekiel Lol Gatkuoth,
Minister of Petroleum of South Sudan. “We had hoped for a favorable
outcome but we believe these large and highly prospective blocks need a
fast and ambitious development program to achieve their full potential. B1
and B2 are now open for direct negotiation.”
Blocks B1 and B2 were once part of the 120,000 square kilometer area known
as Block B, which was divided into three licenses in 2012. The area is
highly rich in hydrocarbon deposits but has experienced very little
exploration. In March 2017, Pan African independent Oranto Petroleum
Limited signed an exploration and production sharing agreement (EPSA) with
the Government of South Sudan for Block B3. The area covers 25,150 square
kilometers and has estimated reserves in place of more than 3 billion
barrels.
“The resource base in these blocks are enormous and we need committed
operators who are ready to invest and work with our government to comply
with the laws of our country,” said the Minister. “South Sudan is creating
an enabling environment for companies to operate. We want companies to
invest, explore, produce and we are ready to offer incentives to
investors.”
The Government of South Sudan has adopted a very pro-business stance with
the expectation that aggressive investments in the petroleum sector will
stimulate the economy. In 2017, the Ministry of Petroleum announced it was
planning to double its total oil production by next year. South Sudan
currently produces 130,000 barrels per day but can produce as much as
500,000 barrels per day.
The Ministry of Petroleum invites companies to negotiate directly on
Blocks B1 and B2. Government officials will be present at the Africa Oil &
Power conference in Cape Town on June 5, 2017 to advance discussions with
interested parties.