By Matik Kueth
The London High Court has stepped in to freeze a $20 million shipment of South Sudanese crude oil, after the country failed to deliver on a $100 million pre-payment loan issued earlier this year.
BB Energy, a UAE-based trading firm, secured the urgent injunction to prevent the oil from being diverted to third-party buyers in Dubai and Singapore.
Court evidence revealed that South Sudan had used the $100 million loan almost immediately to settle a dispute with Malaysian oil giant Petronas, leaving BB Energy still owed $61.5 million as the figure is expected to rise if promised shipments are not delivered.
Justice Christopher Butcher, presiding over the November 18 hearing, opted for an injunction rather than a cash judgment, citing South Sudan and its state oil company, Nile Petroleum, as unlikely to have the funds to pay damages.
The case underscores the risks of lending to South Sudan, a nation heavily reliant on oil-backed loans and with total outstanding debt now estimated at $2.3 billion.
Previous creditors, including Afreximbank and traders such as Vitol, have faced similar frustrations, with legal battles exposing the country’s precarious financial situation.
BB Energy has pledged a bank guarantee of up to $25 million to cover storage or related costs for affected parties, but the frozen shipment highlights the growing concerns among traders about South Sudan’s financial credibility.