UK court lifts BB Energy’s injunction to allow the sale of South Sudan oil cargo
The London High Court lifted on Thursday an injunction that prevented the sale of a South Sudanese oil cargo scheduled to load within the next few days. This was after the claimant BB Energy decided to not ask to continue the injunction.
BB Energy has said that it will pursue legal action against South Sudan for its alleged failure of delivering oil BB had paid $142m in prepayment agreements spanning 2024-2025. If the country does not resume deliveries and payments promptly, BB Energy will take further legal action.
BB Energy representatives refused to request an extension of the injunction after reaching agreement with representatives from rival trading firms Euro American Pte Ltd and Meridian Energy Pte Ltd. These firms intervened in the case, having bought the oil cargo.
In a press release, BB Energy stated that it had instructed its legal advisors to not seek an extension of injunction during the return hearing. This would allow the temporary order expire.
We have agreed to work closely with the Ministry of Petroleum, and the Ministry of Finance to settle our claims amicably with South Sudan.
The case of South Sudan, a debt-ridden country, highlights the risks commodity traders are taking when they enter into prefinance contracts to secure oil purchases.
BB Energy representatives stated that a recent shakeup in South Sudan’s government where a new Petroleum Ministry Undersecretary was named this week meant they could engage with the government more constructively over the contracts.
Documents show that the High Court granted the injunction Nov. 18 pending the return hearing on Thursday. This halted the sale of 600,000 barrels of crude oil Nile Blend due to be loaded on Nov. 27.
Documents from the court show that South Sudan gave Euro American the cargo for which Meridian, a trader, paid $30 million, and then sold it to Cathay Petroleum International Ltd.
Documents show that the cargo will now be loaded on Dec. 4 - 6 after drone strikes in Sudan caused delays to loading operations.
BB Energy reported that South Sudan failed to deliver cargoes due to be loaded in May, July and September under its prefinancing agreement for five oil cargoes during this year.
The South Sudanese government was not present at the Thursday court hearings in London. South Sudan's Ministry of Petroleum didn't immediately respond to an inquiry for comment.
Euro American refused to comment. Meridian did not respond immediately to the'request for comment' sent after business hours in Asia. Reporting by Robert Harvey, London; Editing by Elaine Hardcastle
(source: Reuters)
