An estimated $1.25 billion worth of assets were taken by South Sudan’s Nile Petroleum Corporation (Nilepet), which is being sued by Malaysian oil company Petronas.
Following around three decades of operations in the region, Petronas revealed earlier this month that it was planning to leave South Sudan. This prompted the move.
The UK-based oil and gas company Savannah Energy and the Malaysian oil corporation had begun talks over the sale of the latter’s assets.
The Malaysian company, however, made the decision to forgo its investment as a result of rising expenses from a damaged pipeline that has been impacted by the ongoing turmoil in neighboring Sudan.
South Sudan is being sued by Petronas, which claims the nation interfered with the sale of its assets.
Chol Deng Thon Abel, an undersecretary of South Sudan’s Petroleum Ministry, wrote a letter to Petronas on August 5th, accusing the corporation of breaking national regulations.
According to the letter, Petronas gave the South Sudanese government an ultimatum for the sale of its assets and neglected to carry out an environmental audit and pay damages.
Senior General Manager Azahari Shuid of Petronas has denied these allegations, claiming that the government’s actions were “arbitrary, unreasonable, and unlawful.” Petronas first entered the area in 1997 when it started extracting crude as a member of a group headed by Lundin Oil.
Since then, the Swedish business has been under investigation by the law, with former executives facing charges related to their suspected involvement in war crimes committed in what is now South Sudan during the rule of Sudan.
Rights organizations have also drawn attention to how foreign oil exploitation contributes to the ongoing violence in South Sudan.
