A string of deals signed by President Salva Kiir over the past four months has demonstrated the country’s desperation for fresh streams of revenue as the civil war now approaches its four-year anniversary.
Toward the end of last year, Suiss Finance Luxembourg AG announced a $10.5 billion deal that could rise to $105 billion in value when joint ventures in infrastructure and transportation are taken into account. While some may view this as a large stepping stone toward bringing back its oil revenues, Kiir’s critics were quick to attack the leader over the deal once news broke, referring to what they called “shadowy” businessmen from Kampala who had brokered the contract.
Another recent deal involves Oranto Petroleum, which has committed to a $500 million “comprehensive exploration campaign, starting immediately” to evaluate oil prospects in the 25,150 kilometers that make up Block B3. Juba approved the block a couple of weeks ago, giving Oranto a 90 percent share, while keeping only 10 percent for the government’s Nile Petroleum (Nilepet). Oranto is a subsidiary of Nigeria’s Atlas Petroleum International Ltd (“Atlas”). The deal with Oranto has drawn harsh criticism due to a report from technical officials in the Ministry of Petroleum in which claims were made that the company lacked the technical expertise and financial capacity to manage the Block B3 project. World Oil described Oranto’s investment as a “bet” that South Sudan could end its civil war within three years to attract new investments to its ailing oil sector. Oranto has a history of finalizing oil deals with governments, and later selling oilfield rights to larger international corporations, effectively serving as a middleman. Middlemen may not appear to be the perfect partners for struggling governments, but they are giving Juba a means to reach multinationals that can bankroll the development of its energy resources.