(JUBA) – A new state owned oil company from South Africa has acquired a 90% stake in one of South Sudan’s most promising oil exploration zones, Block B2, located in Jonglei State.
The South African National Petroleum Company (SANPC), launched in May through a merger of PetroSA, iGas, and the Strategic Fuel Fund, signed a Production Sharing Agreement (EPSA) with South Sudan’s Ministry of Petroleum to jointly operate the block.
The remaining 10% stake in Block B2 is held by South Sudan’s national oil company, Nilepet. The block, part of the wider Nile Orange Energy Project, is believed to hold reserves of up to 3.5 billion barrels of oil, making it one of the largest untapped hydrocarbon fields on the African continent.
According to South Africa’s Department of Mineral Resources and Energy (DMRE), the agreement is seen as part of a strategic drive to enhance regional energy security, economic integration and long term growth. The investment is also expected to deepen South Africa’s diplomatic and economic relations with South Sudan.
While the deal has been welcomed by energy stakeholders in both countries, analysts have expressed concerns about the security situation surrounding Block B2. The area lies in a region that has experienced frequent outbreaks of violence, including ethnic clashes and armed group attacks.
Jonglei State borders Unity and Upper Nile states, regions that continue to experience instability. In March, heavy fighting between government forces and militias was reported in Nasir County, Upper Nile State, roughly 150 km north of Block B2.
In May, a Médecins Sans Frontières hospital in Fangak, Jonglei, was bombed, reportedly killing 12 people. The attack took place within close range of the new oil exploration site.
Humanitarian organisations and oil analysts say that while the economic potential of the area is significant, development will depend heavily on political stability and coordinated security planning.
Despite the risks, South African officials see the project as a major step toward diversifying the country’s energy sources and reducing dependence on foreign oil. Minerals and Petroleum Resources Minister Gwede Mantashe said the venture is a “game changer” for South Africa’s long-term energy strategy.
If successful, the project could generate large revenues, support job creation in both South Sudan and South Africa and attract future infrastructure investment in a country still recovering from years of civil conflict.
Details of Block B2 Deal
| Item | Details |
|---|---|
| Location | Block B2, Jonglei State, South Sudan |
| Ownership | 90% SANPC (South Africa), 10% Nilepet (South Sudan) |
| Estimated Reserves | Up to 3.5 billion barrels of oil |
| Initial Exploration Start | Late 2025 (security permitting) |
| Project Name | Nile Orange Energy Project |
| Strategic Importance | Regional energy security, export revenue, investment |
South Sudan’s Ministry of Petroleum welcomed the deal, saying the involvement of SANPC would bring new investment, technical expertise and modernisation to the oil sector. The ministry hopes the partnership will also support long term development and job creation for South Sudanese citizens.
However, political opposition in South Africa has raised questions about the timing and financial risks of the venture. Spokesperson Sphesihle Zondi of the Democratic Alliance criticised the decision to include PetroSA in the merger, arguing that the struggling entity may be financially burdened further by entering a conflict prone exploration zone.
Energy analysts say SANPC’s success will depend not just on drilling oil, but also on navigating diplomatic tensions and managing operations in a region where logistics and security remain major challenges.
The exploration phase is expected to begin in late 2025, depending on improvements in regional security. For South Sudan, the project could signal renewed investor confidence in its oil sector if the country can maintain enough stability to support it.
