News 228 Sep 2023 14:19
This article is even more interesting and the timing of it being released as well, and talks about the production sharing agreements continuing as they are because of technical hurdles and South Sudan inability to nationalise the assets
Technical hurdles force South Sudan to consider retaining 1997 oil deal
Juba, Wednesday (September 27, 2023) - There has been a consideration to review the Exploration and Production Sharing Agreement (EPSA) signed between the government of the then Sudan and China National Petroleum Operating Companies, Petronas, and Sudapet nearly a decade ago.
The agreement, which came to effect on March 1, 1997, granted the oil consortium the right to explore and develop blocks within the country's southern territory.
The consortium bears the financial and technical risk of exploration, and if commercially viable resources are discovered, they will undertake the production and extraction operations, according to the agreement.
Areas of operations, it entails, included but were not limited to Block 1a, located onshore South Sudan and now operated by Greater Pioneer Operating Companies, Block 2a, and Block 4 - all of which are located in the Muglad Basin.
In return for assuming the risk and investing in exploration and development of these blocks and sub-blocks, the consortium was granted an exclusive right to the resources found in the designated area.
The terms and conditions of the agreement included provisions on the duration of the contract, work obligations, fiscal terms, profit sharing, and other regulatory requirements.
"The contractor, subject to the provisions of the Agreement, shall carry out Petroleum Operations to explore for, appraise, develop, and produce commercial discoveries in the contract area, provide all capital, machinery, equipment, technology, personnel, and services necessary for carrying out petroleum operations," reads Article III of the agreement under the Grant of Rights and Term.
The content of the aforementioned article is unlikely to change after the inaugural National Economic Conference recommended that Joint Operating Company (JOC) remained in charge of the ownership and control of the oilfield due to a lack of adequate local expertise to nationalize the oil industry.
The recommendation came months after Puot Kang, minister of Petroleum, received a certificate of approval of EPSA from the National Petroleum and Gas Commission Chairperson Caesar Oliha Marko in November 2022, hinting the continuation of the agreement regulating an oil block in Unity State.
"The Chairperson of the National Petroleum and Gas Commission (NPGC) Amb. Caesar Oliha Marko handed over the approval certificate of EPSA/ Block B2 to my office. In this regard, the commissioners of NPGC unanimously resolved to approve the exploration production sharing agreement for Block B2 in Jonglei State," he wrote on X.
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