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August 29, 2024 (Juba) – Malaysian oil company Petronas has sued South Sudan’s Nile Petroleum Company (Nilepet) to seize its assets worth about $1.25 billion.
The move comes after Malaysia’s Petronas announced earlier this month that it planned to exit South Sudan, after operating in the region for about three decades.
The Malaysian oil company has launched talks with British oil and gas company Savannah Energy about selling its assets.
However, the Malaysian company decided not to invest due to the ongoing conflict in neighboring Sudan, which damaged the pipeline and caused rising costs. Petronas is suing South Sudan, accusing the country of obstructing the sale of its assets.
On August 5, Petronas received a letter from South Sudan’s deputy petroleum minister, Chol Deng Thon Abel, accusing the company of violating national laws.
The letter accused Petronas of failing to conduct environmental audits and pay compensation, and issued an ultimatum to the South Sudanese government to sell its assets.
Petronas has refuted the allegations, with its senior managing director Azahari Shuid saying the government’s actions were “arbitrary, unreasonable and illegal.” The roots of Petronas’ involvement in the region date back to 1997, when the company began extracting crude oil as part of a consortium led by Lundin Oil.
The Swedish company has since faced legal scrutiny, with former executives being prosecuted for alleged war crimes during the Sudanese regime in the region now known as South Sudan.
Human rights groups have also highlighted the role of foreign oil extraction in exacerbating South Sudan’s long-running conflict.
(English stone)
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