Oil pollution in Unity state - Courtesy
South Sudan’s Minister of Investment has told BNN Bloomberg that oil companies operating in the country, including outgoing subsidiary of the Malaysian oil and gas giant Petroliam Nasional Bhd, should restore the environment after years of widespread degradation.
Petronas Carigali Nile Limited (PCNL) announced in August 2024 that it was withdrawing from South Sudan as part of its long-term investment plan.
The energy firm said the decision was made following two years of divestment initiatives, which started on the same year that South Sudan launched an environmental audit on oil companies.
But Petronas’ departure after 24 years of operation in South Sudan has raised brows in Juba, as it came on the heels of the impending environmental audit report on oilfields.
“There are a lot of issues around this and it has to be addressed and this is one of the areas where there is headache between the government and the investment companies,” Investment Minister Dr. Dhieu Mathok said in an interview with BNN Bloomerg.
“That is the real situation. It is not just Petronas alone. We have many cases of deformities, a child being born without some body parts.”
The South Sudan official accuses the Malaysian oil giant of failing to carry out an environmental audit and paying damages to local communities when it abandoned its operations last month.
Aisha Abbas, a South Sudanese lawmaker representing the oilfield area of Melut in Upper Nile State agrees with the investment minister and previously raised concerns over the timing of the departure of Malaysian oil company.
“On the Malaysian Petronas company which left the country and the environmental audit report is not yet out, if the report comes out negative, who will be responsible for our suffering in the oil producing areas of Melut, Unity and Panriang,” Mr. Abbas told a parliamentary sitting in August.
In May, South Sudan Minister of Environment told the parliament that the environmental audit report on the oilfields was almost complete, but that the contracted companies have withheld the findings due to non-payment of their dues by the government.
The environmental audit was commissioned in 2022 by the Ministries of Petroleum and Environment, which contracted three companies to carry out the assessment.
Following Petronas’ withdrawal, Savannah Energy, a UK oil and gas company – was poised to take control of substantial operations across three joint operating companies (JOCs) in South Sudan.
The operations 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 later said parties were unable to finalize agreeable terms, leading to the cancellation of the deal.
South Sudan’s state-run Nile Petroleum then took control of the local oilfield and assets and said it was seeking international partners to both sustain operations and increase output at the blocks.
Meanwhile, Petroliam Nasional recently said its unit had initiated proceedings against South Sudan for allegedly blocking a $1.25 billion sale of its local assets and instead taking over the business.
”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,” a statement published on the Bloomberg reads in part.
Environmentalists say South Sudan experienced environmental damage, deforestation, soil and water contamination, and health issues in and around the oil-producing areas.
The civil war that started in 2013 – just two years after independence was seen to have prevented the proper management of the environment.
In the past, the Ministry of Petroleum and oil companies came under increased criticism over oil leakages that reportedly contaminated the ecosystem around the oil-producing areas.
Both local and international campaign groups have reported widespread environmental pollution, as chemicals from oil wells are said to have been washed to settlements by floodwaters, leaving animals and people affected.
Reports emerged of women giving birth to deformed babies and stillbirths, and were subsequently confirmed by indigenous community.
In 2015, German human rights and relief organization— Sign of Hope said the health of more than 180,000 people in northern Unity State was at risk due to drinking of water contaminated by the crude oil.
The study found that oil operations released 8.3 million tons of salt, 7.9 billion liters of well-drilling fluids including lead, nickel and cadmium, and 6 million liters of crude into South Sudan’s soil between 1999 and 2020.
The contaminants affected communities in the oil-producing regions severely, depriving them of their rights to clean water, health and life, according to the group.
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