South Sudan is facing a major lawsuit in a London court after global oil trader BB Energy accused the government of failing to deliver crude oil under a pre-payment agreement, Arab News reported.
The lawsuit, filed last month, sheds light on the deepening financial troubles and governance failures plaguing the country’s petroleum sector the backbone of its fragile economy.
According to court documents and statements from the company, BB Energy had entered a contractual deal with South Sudan’s Ministry of Petroleum to receive oil shipments in exchange for advance financing.
However, the country has “defaulted on delivery,” a BB Energy spokesperson said, adding that while the legal process is underway, the company remains open to a negotiated settlement.
Oil remains the country’s primary source of income, yet poor management, corruption, and armed conflict have consistently disrupted its production and export flows.
In March, the South Sudanese government placed the petroleum minister, a member of Dr. Riek Machar’s SPLM-IO, along with several colleagues, under house arrest amid internal political disputes and escalating tensions within the unity government leadership.
Officials in Juba have yet to comment on the latest developments.
The case comes just weeks after another oil trader, Vitol, filed and then resolved a similar dispute in London involving a cancelled shipment.
Separately, a London court in May ordered South Sudan to repay $657 million to Afreximbank over defaulted loans, a coincidence in figures that underscores how oil-related financial obligations have become a repeated liability for the state.
The International Monetary Fund (IMF) estimates South Sudan’s public debt reached $3.7 billion in 2023, with over $550 million owed specifically to oil trading companies.
South Sudan’s oil production, once at 400,000 barrels per day, has plummeted due to years of conflict and infrastructure collapse.
In 2023, output fell to just 72,000 bpd following damage to a key export pipeline. Although production rose to 138,000 bpd in June after repairs, experts say continued legal and financial pressure could threaten future output and investment.
As international lawsuits mount, the case filed by BB Energy not only reflects a growing loss of confidence in South Sudan’s oil sector, but also signals the high financial risks now associated with doing business with the country.
