The High Court in London has issued a severe injunction barring South Sudan from entering into any new pre-payment agreements regarding the country’s oil exports or pledging future oil cargoes as collateral to secure financing. This ruling represents the latest escalation in a legal battle brought by BB Energy, a prominent commodity trading firm, as it seeks to recoup a $100 million debt from the South Sudanese government.
According to information published on Monday by “Global Trade Review” (GTR), a reputable independent publishing and events company specializing in global trade and finance, the court order was issued on May 15. The court document states that until a further hearing scheduled for June 5, South Sudan “must not accept any new pre-payments or enter into any arrangement that has the effect of being a pre-payment, from any third party in relation to any cargo of Dar Blend or Nile Blend crude oil.” Furthermore, the country is strictly prohibited from incurring additional debt secured against its oil cargoes.
Oil exports serve as South Sudan’s primary source of revenue and function as the backbone of its economy. However, in recent years, the civil war-torn nation has taken on numerous loans from various international banks and commodity traders. These loans were supposed to be repaid by delivering crude oil cargoes directly to the lenders.
However, as GTR previously reported, the South Sudanese government has repeatedly failed to honor its commitments. In almost all cases, instead of delivering the promised oil shipments to its lenders, the government sold them to other buyers offering better immediate terms.
In November of last year, BB Energy secured a separate court order that prevented South Sudan from selling a specific oil cargo that was scheduled to be lifted from a Sudanese port. The trading firm claimed that this shipment should have been used to partially repay a $100 million loan it had extended to the cash-strapped nation earlier that year.
The latest court order goes much further and is far more sweeping. It covers all of the government’s oil cargoes and delivers a direct warning to South Sudan that if it disobeys the directive, “you may be held to be in contempt of court and may be fined or have your assets seized.”
Beyond that, the document stipulates that any other party—including international banks or trading houses—who assists or facilitates South Sudan in breaching this restriction despite being aware of the order could also be found in contempt of court and may be “imprisoned, fined or have their assets seized.”
Sources familiar with the matter stated that this specific provision is designed to deter other global traders and financial institutions from offering oil-backed pre-payment financing to the South Sudanese government.
When asked for comment, a spokesperson for BB Energy stated: “Following the favorable court decision obtained by BB Energy in November, we indeed successfully lifted an overdue crude cargo, resulting in a substantial reduction of our outstanding exposure.” They added, “Today’s order should further support the lifting of additional cargoes and accelerate the continued reduction of such outstanding amounts.”
According to United Nations reports, while the bulk of South Sudan’s oil production is exported by commercial joint-venture producers, the government retains control over its own share, which amounts to roughly one cargo per month.
South Sudan has chosen not to participate in the UK legal proceedings or appoint legal representation. This mirrors the authorities’ hands-off approach in 2024, when they failed to engage in a lawsuit brought by the African Export-Import Bank over a $657 million oil-backed loan, which ultimately resulted in a successful judgment for the bank. The South Sudanese Ministry of Finance did not respond to requests for comment regarding this latest London court ruling.
