South Sudan oil: Legal dispute in London over $180 million worth of shipments

Written by Ziad Abdel Fattah:

South Sudan's oil sector has returned to the forefront International SceneThis comes amid a heated legal battle before the High Court in London, following a move by commodities trading company BP Energy to halt deliveries of crude oil shipments valued at approximately $180 million.

The government of South Sudan has not repaid a $100 million loan.

The London-based company asserts that the country’s government has yet to repay a $100 million loan it received in February 2024, noting that the agreement stipulated repayment either in cash or through shipments of crude oil.

Dispute over 3 shipments

According to what the company presented to the court, three oil shipments that were scheduled to be loaded between May 29 and mid-June represented the final payment to settle the debt, but they had already been sold to other parties, including Dubai-based companies BGN, Chiangwei and A&M.

During the hearings, BP Energy’s lawyer explained that the company had previously warned BGN against entering into any agreements with the South Sudanese government, but the latter went ahead and the very next day paid $50 million in advance for those shipments.

The company warned of incurring “heavy losses” if the oil were delivered to other buyers, accusing some rival traders of making deals despite knowing that there were existing contractual obligations.

In contrast, lawyers for the other companies rejected these accusations, asserting that they had already made advance payments of millions of dollars and had made logistical arrangements, including preparing tankers to transport oil from Sudanese ports, with one tanker expected to arrive imminently.

Increasing pressure on South Sudan's economy

This dispute comes at a time when the country’s economy is facing increasing pressure, as the government relies heavily on advance financing and oil-backed loans to cover its expenses, amid billions of dollars in accumulated debt to international institutions and commodity traders.

Implications for the future of oil trade in South Sudan

The High Court in London is expected to issue its ruling in the case on May 29, amid expectations that the outcome will have major repercussions for the future of South Sudan’s oil trade, as well as its financial credibility in global markets.