South Sudan Minister of Petroleum, Eziekel Lol Gatkuoth and South African Minister of Energy, Jeffry Thamsanga Radebe shake hands after signing the agreement in Juba on Monday 6th May, 2019. PHOTO: Eye Radio/Joakino Francis

South Sudan and South Africa have officially signed an oil deal worth $50 million.

The agreement which was inked in Juba this morning by South Sudan’s Minister of Petroleum and the South African Minister of Energy covers three major projects, namely: oil exploration and production, building of an oil refinery and the construction of a pipeline.

According to the documents, the deal’s lifespan is six years from the date signing.

“We are looking at $1 billion throughout the duration of this three projects, but we have committed about $50 million for all the processes that are involved in exploration,” said Jeff Radebe, South African Minister of Energy.

The Minister of Petroleum, Ezekiel Lol, said in 2018, the government asked South Africa to invest $1 billion into South Sudan for the construction of a refinery, a new oil block and a pipeline.

He said this deal provides money just for the exploration, and there are expectations that oil production will begin within the six years time-frame.

“You know the exploration period is six years starting from today… if we can get the oil within the first year then we can start producing, but the maximum period that we will use for exploration is six years,” Ezekiel Lol said.

The Nile Petroleum, Nilepet, company and the South African Strategic Fuel Fund, SFF, are expected to coordinate efforts in producing oil within the provided timeline.

The two state corporations will launch comprehensive survey exploration campaigns, seismic acquisition and drill oil prospective wells.

The SFF will also train South Sudanese personnel, embark on social and community development projects by ensuring local content and the empowerment of women.

“Our work and acquisition of new seismic will reveal better information on various structures. We believe there are highly significant quantities of oil in Block B2. We look forward to a few wildcats and appraisal wells in the near future”, Godfrey Moagi, Acting CEO of SFF stated.

B2 area includes parts of the Muglad Basin with potential oil wells, and is part of the 120,000 square kilometer Block B which was split into three in 2012.

Block 2 is the largest block in South Sudan; comprising of a number of states, that includes, Eastern Lakes, Terekeka, Jonglei, Buma, Jubek and former Eastern Equatoria.

“South Sudan has great potential, yet our country remains vastly under-explored, and we believe the entry of new players like the SFF will lead to new world-class discoveries very soon given the aggressive exploration program and great petroleum viability of Block B3,” Lol said.