South Sudan’s Nilepet is working on ways to tackle production decline at Blocks 3 and 7, tackling the lack of investment from partners.
Company managing director Bernard Amuor Makeny, talking to Terab Media today, said declines at the blocks were not driven by war in Sudan.
Dar Petroleum operates the blocks, in the Melut Basin, with China National Petroleum Corp. (CNPC) holding 41% and Petronas 40%. Nilepet has just 8%.
“The partners need to inject in a lot more capex, to do more and drill more wells,” Makeny said. “They’re only sustaining production at the moment. The investors are anxious because the [block licence] is coming to an end in 2027.”
Nilepet can take a different tack, he said. “We’re looking at other ways to generate revenue and invest in these projects. We bring in new technology and convert abandoned wells to producing wells. We need to give confidence to the partners to bring in more spending.”
Operating
The future may well involve Nilepet taking a more active role. “To become an operator is a gradual process,” he said. “Nilepet over the previous years has not actively participated in the partners’ roundtables.”
Makeny said the company was aiming to “develop capacity for tomorrow”.
The executive said he had been involved in driving changes at Nilepet since his arrival at the start of the year. This included increasing salaries for workers, changing the governance structure and passing the company’s first budget.
Makeny has faced some criticism over some personnel changes. The official defended the replacement of vice presidents at the joint operating companies, saying this was a normal step to take. “We need new energy to carry on with the transformation agenda.”
A near-term test is the sale of Petronas’ local assets to Savannah Energy. The latter has said it expects to publish an admission document to AIM by July 28. Savannah is to acquire the assets for $1.25 billion, with closing expected in the third quarter of this year.
Trimming targets
Ecofin Agency reported earlier this week that South Sudan had pushed back its plans to increase production. Initially, it had targeted 230,000 barrels per day by the end of 2024, now it aims to reach this in 2026.
The news agency reported that recent flooding had posed logistical challenges, in addition to a lack of investment.
Another challenge is the conflict in Sudan. Makeny said the company was “mindful” about the situation north of the border.
“It’s our hope that the conflict does not escalate to a point where the infrastructure is threatened. There’s constant engagement with Sudapet. We are mindful of being neutral in the conflict but risk is always there.”
Nilepet documents were leaked recently, showing the company was establishing an international arm. The company acknowledged the leak and said it was “normal business progress for a corporation to have a business account at the international level”.
The company opened accounts in Kenya and the United Arab Emirates.
The documents appear to show a new company is established in Dubai.
Martha Nyamal Choat has 40% of the shares in the new company, while Matiok Santino Akuei and Stanslaus Tombe Bonda have 30% each. Choat is the deputy managing director of Nilepet, Bonda is director general of E&P while Akuei is director general of finance and services.
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