PETRONAS announced its immediate exit from South Sudan on 7 August 2024, abandoning its 40% stake in the country’s petroleum industry without reimbursement. Consequently, its once valuable assets are now with the state oil company Nilepet. The impromptu exit of Malaysia’s oil major illustrates the grim prospects for South Sudan’s oil industry. PETRONAS leaves a well-documented legacy behind of environmental mismanagement and alleged complicity in war crimes, for which it denies any responsibility. Instead, the company claims $1.25 billion from the Government of South Sudan for non-cooperation with the sale of the assets. Local politicians and civil society groups blame PETRONAS for environmental damages. Government representatives allege that PETRONAS had broken the law as it had not conducted an environmental audit and paid damages, but the company is now no longer within the reach of South Sudanese authorities.
PETRONAS momentous decision has not received much attention. Nonetheless, its failure to find a serious buyer indicates that the South Sudan’s oil industry are is on its last legs, with major consequences in a country where the Government is so extremely dependent on oil revenues. The decision also shows that, despite having adopted an excellent human rights policy last May, PETRONAS does not intend to address its most salient human rights issue: its role in war crimes in South Sudan. An official assessment of the industry’s environmental impacts is long overdue and Government representatives have suggested that PETRONAS’ exit aims to escape the costs of its legal obligations. The Chinese National Petroleum Company is now the dominant force in South Sudan’s industry and it would be surprising if the country’s cash-strapped Government would hold the company to account for the environmental and human damages that it has caused and contributed to.
PATRONAS is implicated in the Lundin war crimes trial through its participation in Lundin’s consortium and its endorsement of the way the consortium was managed. It has also been accused of complicity in similar crimes during the South Sudanese civil war 2013-2018.
Civil Society Coalition on Natural Resources (CSCNR) has issued a press statement after PETRONAS ignored invitations to discuss grievances:
