Petronas exits South Sudan, Savannah energy deal collapses

August 9, 2024 (JUBA) – Malaysian oil company Petronas has announced its withdrawal from South Sudan after 14 years, citing a changing industry environment. The exit of Petronas Carigali Nile Ltd (PNCL), confirmed in a statement, comes as UK-based Savannah Energy terminated its planned $1.25 billion acquisition of Petronas’ oil and gas assets in the country.

A senior Petronas official, speaking anonymously, attributed the withdrawal to multiple factors, including the ongoing conflict in Sudan, the inability to ensure staff safety, and mounting operational costs. The official highlighted the company’s losses and lack of return on investment.

Petronas held significant interests in three joint operating companies, encompassing 64 producing fields with an average gross production of 153,200 barrels of oil per day in 2021. Partners in these ventures include China National Petroleum Corp, Sinopec, India’s Oil and Natural Gas Corporation Ltd, and South Sudan’s national oil company, Nilepet.

The collapse of the Savannah Energy deal, initially announced in December 2022, was attributed to the inability to complete the transaction on the originally envisioned terms.

Petronas stated that the withdrawal aligns with its ongoing divestment initiatives and long-term strategy amidst a changing industry landscape and the accelerated energy transition. The company emphasized its commitment to ensuring a smooth transition and safeguarding employee rights.