Oil Trader BB Energy Wins Case Against South Sudan in London

(JUBA) – BB Energy has obtained an urgent injunction from the London High Court stopping the government of South Sudan from selling an oil cargo worth more than $20 million. The order, issued by Justice Christopher Butcher on 18 November, prevents the export of 600,000 barrels of Dar Blend crude that was due to be lifted from Port Sudan on 27 November. The injunction will remain in place until the court holds a further hearing.

The dispute concerns a $100 million prepayment loan that BB Energy advanced to South Sudan in February 2024. The loan was agreed on the basis that the company would receive five crude cargoes during the year. Court documents show that no cargo was delivered and that the government also failed to repay the money in cash.

According to evidence presented in court, South Sudan had access to crude during the period but sold the shipments to other buyers rather than delivering them to the trader. BB Energy now estimates that it is owed $61.5 million, with the amount likely to rise if more scheduled cargoes do not arrive.

The court also heard that the government used the BB Energy funds to settle its dispute with Petronas, which completed its exit from South Sudan’s oil sector in 2023. Justice Butcher said that relying on financial compensation alone would not be effective because “there are good grounds for thinking that neither the government nor Nile Petroleum has the funds” to settle a judgment matching the cargo value.

The injunction blocks the government from transferring the cargo to EuroAmerican Energy in Dubai or Cathay Petroleum International in Singapore. According to BB Energy’s lawyers, neither company had made any prepayment for the shipment. To protect all sides, the court ordered BB Energy to indemnify South Sudan and Cathay Petroleum for up to $25 million in case the halted cargo leads to storage or operational costs.

The government of South Sudan and Nile Petroleum Corporation did not attend the hearing and did not reply to legal communication. Justice Butcher noted that enforcing a foreign ruling in South Sudan would be slow and difficult, pointing to Transparency International’s assessment which ranks the country as the world’s most corrupt.

The case draws attention to the growing risks linked to South Sudan’s oil-backed borrowing. Earlier investigations placed the country’s oil secured debt at about $2.3 billion as of July. Lenders include Afreximbank, Qatar National Bank, and the UAE-based Nasdec General Trading. Many of these debts rely on future oil deliveries for repayment.

This year, Afreximbank secured a $657 million judgment against South Sudan, although both sides later said they reached an “understanding.” Vitol also filed a claim but later reported that the dispute had been settled.

The Ministry of Petroleum recently confirmed that it is in talks to secure new financing, including $1.5 billion from China’s CNPC and $1 billion from India’s ONGC Videsh. Both facilities would be repaid through future crude allocations.

International finance bodies have warned repeatedly about the risks tied to resource-backed loans. AfDB President Akinwumi Adesina last year described such facilities as “expensive” and harmful to African economies. IMF Managing Director Kristalina Georgieva has also called them “predatory and enslaving.”

A UN Human Rights Commission report released in September estimated that South Sudan lost about $390 million in potential income between 2022 and 2024 due to selling crude at deep discounts to high-risk buyers.

With the government silent on the ruling and absent from the hearing, the next steps remain uncertain. BB Energy declined to comment on the case, while the Ministry of Finance has not issued any public statement.

BB Energy Blocks South Sudan From Selling 20 Million Dollar Oil Cargo