South Sudan is ready to reopen negotiation for drilling rights to Blocks B1 and B2, after an attempt to reach a deal with three foreign oil majors broke down due to "irreconcilable differences."
"We have decided ... to open opportunities to other potential investors," Ezekiel Lol Gatkuoth, South Sudan's minister of petroleum, in a statement dated Saturday.
Juba had been trying to work with Total, Tullow Oil, and the Kuwait Foreign Petroleum Exploration Company, but the parties were unable to come to an agreement regarding the terms.
In 2012, South Sudan split its 120,000-square kilometer Block B into blocks B1, B2, and B3. Estimates of the area's fossil fuel potential are high, though actual drilling there has been minimal.
South Sudan has struggled to attract foreign companies to explore for oil and gas due to a civil war that began in December 2013. Reuters reports that the three main companies that continue to work in the world's youngest country are China National Petroleum Company (CNPC), Malaysia's Petronas, and India's ONGC Videsh.
Recent attacks on foreigners working on South Sudan's oil and gas facilities serve as a warning for multinationals to stay away from the new country's national resources, just as oil prices recover enough for Juba to begin profiting from the oil sector.
Related: Is Australia The Next Big Thing In Shale?
The South Sudanese government and three humanitarian agencies declared a famine in some parts of the country in February, while the nation desperately tries to bring its oil facilities back online. A string of deals signed by President Salva Kiir over the past four months has demonstrated the country's desperation for fresh streams of revenue as the civil war approaches its four-year anniversary.
"The government is working hard to reinvigorate the petroleum industry in South Sudan by creating an enabling environment for international oil and gas companies to invest and operate," according to Petroleum Minister Ezekiel Lul Gatkuoth. "It is up to the oil companies to come in, explore and produce. Partnership is what fuels the oil industry."
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More