South Africa has signed an exploration and production sharing agreement (EPSA) with South Sudan for Block B2. The deal will see Block B2 operated by the state-owned Strategic Fuel Fund (SFF), the South African Ministry of Petroleum and South Sudan’s national oil, Nilepet.
Block B2 includes a six-year exploration period, during that period, the SFF and Nilepet will launch a comprehensive aero gravity survey exploration campaign, seismic acquisition and drilling wells. The SFF will also invest in capacity building initiatives, training of South Sudanese citizens, investing in social and community development projects and ensuring local content and women empowerment.
According to South Sudan’s Minister of Petroleum, Ezekiel Lol Gatkuoth “The petroleum resources of Block B2 are vast. For South Sudan to reach its target of bringing back production levels of around 350,000 barrels of oil per day (bpd) and beyond, we need committed new entrants like the SFF.”
“South Sudan has great potential, yet our country remains vastly under-explored, and we believe the entry of new players like the SFF will lead to new world-class discoveries very soon given the aggressive exploration program and great petroleum viability of Block B3. This will support South Sudan’s economic revival and improve trade with other African countries,” said Gatkuoth.
This is not the first of such deal South Africa has signed with Sudan.
In 2018, South Africa agreed to invest $1 billion into South Sudan’s energy infrastructure. South Sudan has the third-largest oil reserves in sub-Saharan Africa, estimated at 3.5 billion barrels and just 30 percent of the country explored to date. Currently, the country produces 160,000 bpd of oil and it plans to increase its oil production capacity to 270,000 bpd by the end of the year.
South African Energy Minister, Jeff Radebe said, “we are bullish about this strategic and unique opportunity into Block B2 with great petroleum potential. It provides South Africa with a chance to further strengthen its energy security while entering one of the top three most lucrative onshore oil and gas markets in Africa.”