South Sudan Deal25 Feb 2025 08:38
Savannah Energy is making a renewed push for coveted oil assets in South Sudan, two years after first agreeing to buy Petronas’ entire business in the troubled East African country, this time with a possible partner, it said Dec. 20.
The London-listed company’s $1.25 billion acquisition of the Malaysian state oil company’s assets, first agreed in December 2022, has faced a string of delays and complications, including slow regulatory approvals, tenuous bids from other entities and the closure of the associated export pipeline in February.
In August, Petronas announced it had officially withdrawn from the country and Savannah said it had terminated the original purchase agreement, but signaled it hoped to proceed on new terms.
Savannah said in a statement Dec. 20 it would issue details of “a proposed alternative transaction in respect of the ex-Petronas assets in South Sudan” or confirmation that a proposed deal is not proceeding. A further update is expected toward the end of February 2025.
It added that “an affiliate of Savannah has signed an agreement with another energy company to discuss collaboration in relation to the potential alternative transaction."
Sources close to the transaction, speaking on condition of anonymity, said the partner was international, rather than local, and the new deal would potentially be a joint acquisition.
The acquisition, which was initially expected to close in September 2023, would make Savannah a significant stakeholder in 64 producing fields across Blocks 3/7, 1/2/4 and 5A in South Sudan, the region’s biggest oil producer with a recent history of civil war and economic malaise.
The country’s most important oilfields are managed by joint operating companies, including the Dar Petroleum Operating Co., and pumped 153,000 b/d of heavy sour crude in 2021, according to Petronas.
South Sudanese oil production peaked at 350,000 b/d after independence from Sudan in 2011, but more than halved prior to the rupture of its only export pipeline through its war-torn neighbor Sudan in February. Output has hovered around 50,000 b/d in 2024, according to the Platts OPEC+ Survey from S&P Global Commodity Insights, with the fighting slowing repair efforts, according to sources.
Sources told Commodity Insights in August that the pipeline's closure could affect the Savannah transaction's value. According to traders, the Sudan war has also hammered differentials for South Sudanese crude.
Interesting quote "Sources close to the transaction, speaking on condition of anonymity, said the partner was international, rather than local, and the new deal would potentially be a joint acquisition."
I wonder who this international partner would be ? Could we do a joint acquisition with someone like Tullow or Afentra ? what would be the split of the joint acquistion 50/50, 60/40, 75/25.
Let's see where this gets too personally a joint acquisition wouldn't be so bad as it would also help Savan
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