KUALA LUMPUR, Aug 26 — Petronas said today its unit has initiated proceedings against South Sudan for allegedly blocking a US$1.25 billion (RM5.46 billion) sale of its local assets and instead taking over the business.
The company announced on August 7 it would exit South Sudan after running operations in the country for around three decades. It was in talks to sell the local assets to Britain’s Savannah Energy, but the oil and gas firm pulled out of the deal on the same day.
South Sudan’s state-run Nile Petroleum then took control of the local oilfield and assets and said it was seeking international partners to both sustain operations and increase output at the blocks.
“Petronas International Corporation has initiated arbitration proceedings at the International Centre for Settlement of Investment Dispute on the divestment of its operations in the Republic of South Sudan,” the parent company told Reuters in an emailed statement. It declined to comment further due to the ongoing proceedings at the World Bank agency.
Earlier this year, the main pipeline carrying oil from South Sudan through Sudan for export — set up by a consortium including China’s CNPC and Sinopec as well as Petronas — suffered stoppages due to war in Sudan.
The exports are an important source of revenue for South Sudan.
Officials at South Sudan’s petroleum ministry did not immediately respond to a Reuters request for comment.
Bloomberg News reported the arbitration proceedings earlier in the day.
— Reuters
