The subsidiary of Malaysian oil and gas company, Petroliam Nasional Bhd has sued South Sudan’s government in an international court for allegedly sabotaging the sale of its assets worth $1.25 billion.

Earlier this month, UK oil and gas company – Savannah Energy terminated its previously announced $1.25bn agreement to acquire the assets of Malaysian state-owned company Petronas in South Sudan.

Savannah was poised to take control of substantial operations across three joint operating companies (JOCs) in South Sudan after Petronas ended its 24 years of oil extraction in the country.

The operations that Savannah sought to acquire include interests in Block 3/7, 1/2/4/ and 5A in Unity State and Ruweng Administrative Area, which began production in 1999, and pump out an average of 153.2 thousand barrels of oil per day in 2021.

However, the British oil firm said on Wednesday that parties were unable to finalize agreeable terms, leading to the cancellation of the deal.

According to the failed agreement, Savannah Energy would have acquired a 40% stake in Blocks 3/7 and a 30% stake in Blocks 1/2/4. Additionally, the Africa-focused company would have secured a 67.9% stake in Block 5A.

Petronas withdrew from its exploration and production sharing agreements in South Sudan in December 2022, aligning with its strategy to focus on investments that match its long-term objectives.

The South Sudan government then disclosed in September 2023 that it signed a 3-billion-dollar agreement with a U.S.-based company to invest in the country’s oil sector and acquire assets of outgoing Malaysian Petronas.

Former Finance Minister Dr. Bak Barnaba later denied his own statement confirming the formal agreement with one Caltech Trading Corporation, adding that the meeting of President Kiir and the firm’s leadership, was just an introduction.

According to NS Energy, Savannah said that it remains in discussions about a possible alternative transaction to acquire the Petronas assets.

Any new deal would be considered a reverse takeover under AIM Rule 14 and would require shareholder approval, keeping the British firm’s shares suspended on the AIM until further details about the transaction are published.

Savannah Energy said that updates on this development and associated matters are expected by early September.

Meanwhile, PCNL planned to coordinate with stakeholders to manage its exit responsibly, adhering to legal requirements and corporate policies.

The state-run Nile Petroleum Corp. assumed control of Petronas’ oil fields and assets – effectively repossessing the Malaysian company’s investment – and announced it would seek a new partner to ensure operations continue.

 In response, Petronas said; “Petronas International Corp. has initiated arbitration proceedings at the International Centre for Settlement of Investment Disputes on the divestment of its operations in the Republic of South Sudan.”

On Monday, 26/08/2024, the Bloomberg quoted the  company as saying;”Petronas International Corp. has initiated arbitration proceedings at the International Centre for Settlement of Investment Disputes on the divestment of its operations in the Republic of South Sudan.”

It declined to comment further, citing an ongoing arbitration proceedings at the World Bank agency.