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American Investors Commit $3 Billion in South Sudan Oil Sector

South Sudan President Salva Kiir on Sunday, September 24 while in New York, announced that his government has inked $ 3 billion deal with American Investors to explore the Oil sector in his Country

President Kiir was in the U.S for the United Nations General Assembly meeting where he met with US investors who agreed to explore the countries Oil sector.

“The government has finalized a 3 billion US dollar deal with an American Oil company, Caltech Investment, to invest in the oil sector in South Sudan,” President Kiir stated

The American investors who run a US- based company are expected to partner with South Sudan government to purchase and take over the shares of the Malaysian State-owned company, PETRONAS, which is now withdrawing from South Sudan’s oil sector.

Chief Overseer of the US firm, Mohammed Malik met with President Kiir in New York on Friday, marking the official entrance of the American company into the South Sudan’s Oil sector.

The Minister of Finance and Planning Dr. Barnaba Chol said the 3 billion US dollar agreement will give an opportunity for South Sudan to grow its oil sector.

Further, Bak said that 1.2 billion US dollars will go into the oil sector, while the rest will boost other vital infrastructure such as roads.

The Chief Overseer of Caltech Investment Mohamed Malik says the acquisition fits appropriately with the company’s strategy of expanding and focusing on the delivery of ‘Projects that Matter’ in South Sudan and the sub-Saharan region.

Boost for South Sudan

In addition, the Company is expected to partner with the government to buy the Malaysian state-owned company’s entire oil and gas asset portfolio in South Sudan for a total cash consideration of up to 1.25 billion US dollars.

The Chief Overseer of Caltech Investment, Mohammed Malik said they are ready to move into South Sudan to begin formal procedures for the takeover.

At the same time, the American company will deliver eight hundred million US dollars to South Sudan to kick-start the project within two months.

Currently, South Sudan’s oil reserves are about 3.5 billion barrels, giving it the third-largest reserves in sub-Saharan Africa, after Nigeria and Angola. Today, 90% of South Sudan’s oil and gas reserves remain untapped, according to the Ministry of Petroleum.

The country produces roughly 150,000 to 170,000 barrels of oil per day, according to he International Crisis Group. However, it only earns income from 45,000 barrels, after the share owed to international companies and fees paid to Sudan. As part of the peace agreement reached with Sudan in 2005.

The deal comes despite the US government placing sanctions on 15 South Sudanese oil firms in 2018 for providing a source of revenue that is used to fund the purchase of weapons and other material that undermine the peace, security, and stability” of the countries within the region.