Petronas International Corporation Launches Legal Action Against South Sudan
Recently, Petronas International Corporation, a subsidiary of the Malaysian oil and gas giant Petronas, initiated arbitration proceedings against the government of South Sudan. This decision came after the state-owned Nilepet took control of Petronas’ assets valued at around $1.25 billion, effectively seizing the Malaysian company’s investments in the country.
Petronas had been operating in South Sudan for nearly three decades before deciding to exit the region due to escalating costs caused by a damaged pipeline, affected by the conflict in neighboring Sudan. Despite negotiations with the UK-based Savannah Energy for the sale of its assets, Petronas ultimately chose to abandon its investment.
The legal dispute arose when South Sudan allegedly obstructed the sale of Petronas’ assets, citing violations of national laws. Petronas has denied these claims, with its senior general manager criticizing the government’s actions as “arbitrary, unreasonable, and unlawful.”
This conflict marks a turbulent end to Petronas’ longstanding presence in South Sudan, dating back to 1997 when it first began extracting crude oil in the region as part of a consortium.