South Sudan’s key energy sector is facing intensified legal and financial pressure as United Arab Emirates–based firm Aquilon FZCO has officially dragged the South Sudanese government and the state-owned Nile Petroleum Corporation (Nilepet) to international arbitration over a high-stakes, disputed oil asset transaction.
The legal proceedings, registered on October 16, 2026, by the International Centre for Settlement of Investment Disputes (ICSID), center around a failed transaction involving oil production assets previously held by Malaysian energy giant Petronas.
According to details reported by the Global Arbitration Review, the contested agreement between Aquilon FZCO and Nilepet was signed in March 2025. Under the terms of the deal, Aquilon was slated to acquire and finalize the transfer of Petronas’s former oil production stakes.
Aquilon maintains that it has already disbursed $50 million toward the transaction. However, with the physical and legal transfer of the production assets remaining uncompleted by South Sudanese authorities, the UAE investor warns that it stands to lose over $300 million if the original agreement is not honored. In its arbitration claim, Aquilon is seeking either the full execution of the asset transfer agreement or financial compensation to cover its total accrued losses.
Adding immediate legal weight to the dispute, the Supreme Court of Mauritius issued a temporary injunction barring Nilepet from selling, transferring, or otherwise encumbering the disputed oil assets while the international arbitration process unfolds. The Mauritian court’s injunction is currently slated to remain in effect through February 5, 2027, at which point judges will determine whether to extend the order further.
This latest arbitration action comes at a particularly delicate time for landlocked South Sudan, whose economy remains almost entirely dependent on crude oil exports routed through Port Sudan. The dispute with Aquilon adds to an expanding web of litigation surrounding the country’s oil infrastructure.
Petronas itself previously initiated separate arbitration proceedings against the South Sudanese government following the collapse of a proposed $1.25 billion deal to sell off its domestic oil assets in 2024. The overlap of these international legal battles poses a growing challenge to Juba’s ongoing efforts to project stability and attract foreign investment into its upstream energy market.
Neither the government of South Sudan nor Nilepet has issued an official public response to the latest filings or the claims made by Aquilon FZCO.
The legal standoff with Aquilon coincides with recent diplomatic and commercial moves by South Sudan to reallocate former Petronas holdings. Just days prior to the international arbitration developments, South Sudanese officials reached a preliminary agreement with Russian state-owned oil firm Zarubezhneft.
Announced by the Office of the President, the deal encompasses a Memorandum of Understanding and a formal Letter of Acceptance executed at the Russian Ministry of Energy in Moscow on October 29. The preliminary accord outlines the proposed transfer of former Petronas shares in two major operating consortia—the Dar Petroleum Operating Company (DPOC) and the Greater Pioneer Operating Company (GPOC)—to Zarubezhneft.
As legal proceedings move forward under the ICSID framework and the Mauritian injunction remains active, the competing commercial agreements highlight the complex geopolitical and legal hurdles surrounding South Sudan’s primary revenue driver.
