South Africa signed an exploration and production sharing agreement (EPSA) with South Sudan for Block B2.
The deal – which is strategic for South Africa as an energy consumer – will see Block B2 operated by the state-owned Strategic Fuel Fund (SFF), the Ministry of Petroleum and Nilepet –the national oil company of the Republic of South Sudan. This is the second EPSA signed since South Sudan gained independence in 2012 and shows progress for the country’s oil industry as production resumes at existing oilfields and new exploration begins.
South Sudan is an established, world-class petroleum producing region, whose territory includes a large part of the Cretaceous rift basin system that has proved petroliferous in Chad and Niger as well as Sudan. It currently produces 160,000 barrels of oil per day (bbl/d) and aims to increase production capacity to 270,000 bbl/d by the end of the year. The country has the third-largest oil reserves in sub-Saharan Africa, estimated at 3.5 Bbbl, with just 3% of the country explored to date.
Under this new EPSA which includes a six-year exploration period, the SFF alongside Nilepet, will launch a comprehensive aero gravity survey exploration campaign, seismic acquisition and drilling wells with great prospects. 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.
“SFF is looking forward to working with our partners in South Sudan to make discoveries on this block. We believe there are highly significant quantities of oil in Block B2. Our work program and acquisition of new seismic will reveal better information on various structures. We look forward to a few wildcats and appraisal wells in the near future. We are thankful to the Government of South Sudan for this opportunity,” stated Godfrey Moagi, acting CEO of SFF.
The B2 area includes productive parts of the Muglad Basin and is part of the 120,000 sq.-km Block B which was split into three in 2012. There has been much interest in South Sudan’s Block B acreages since the entry of Oranto Petroleum to Block B3 in 2017. Much of South Sudan’s oil and gas blocks are yet to be fully explored and resources assessed.