A London High Court has issued a last-minute injunction preventing the government of South Sudan from selling a crude oil cargo valued at over US$20 million, after BB Energy sought urgent legal action to recover part of a US$100 million loan it extended to the cash-strapped nation earlier this year, according to Global Trade Review (GTR).
Justice Christopher Butcher, presiding over the November 18 hearing, ordered that a shipment of 600,000 barrels of crude oil, due to be lifted from Port Sudan on November 27, be frozen until a further hearing.
The injunction blocks the cargo from being transferred to buyers EuroAmerican Energy of Dubai and Singapore’s Cathay Petroleum International, neither of whom made pre-payments for the shipment, GTR reported.
BB Energy DMCC, a UAE-based unit of the London-headquartered commodity trader, claimed it had been promised the oil under a pre-payment agreement.
Evidence presented in court showed that South Sudan failed to deliver any of the expected five cargoes of Dar or Nile blend crude oil as repayment for the loan, GTR noted.
“There indeed have been cargoes,” Justice Butcher said.
“But instead of delivering to the claimant, the Republic of South Sudan has sold them to third parties,” according to GTR.
The judgment revealed that the US$100 million loan, advanced in February, was immediately used by South Sudan to settle a long-running dispute with Malaysian oil giant Petronas, which exited the country’s oil sector in 2023.
BB Energy is currently owed US$61.5 million, with the amount set to rise if remaining shipments are not delivered.
Neither the government of South Sudan nor Nile Petroleum, the state-owned oil company guaranteeing the deal, appeared in court or responded to BB Energy’s claims.
Justice Butcher said he opted for an injunction rather than damages because South Sudan and Nile Petroleum likely lack funds to meet a monetary judgment, citing the nation’s high ranking on Transparency International’s corruption index, according to GTR.
The ruling underscores growing concerns over South Sudan’s reliance on oil-backed loans, with outstanding debt estimated at US$2.3 billion.
Previous cases include Afreximbank, awarded US$657 million by a London court earlier this year, and claims from traders such as Vitol, some of which were later resolved, GTR reported.
The injunction is intended to prevent the oil from leaving Port Sudan, through which South Sudan exports most of its production via pipeline.
BB Energy will provide a bank guarantee of up to US$25 million to cover potential damages or storage costs for affected parties.
South Sudan’s is yet to comment on the matter.
