London court extends ban on South Sudan oil prepayment deals

BB Energy initiated legal proceedings in London’s courts last year, alleging that South Sudan failed to deliver oil cargoes purchased under the prepayment arrangements

By Agencies

UNITED KINGDOM – London’s High Court has upheld an injunction preventing South Sudan from entering into new oil prepayment agreements until it settles outstanding obligations to commodities trader BB Energy, according to court documents seen on June 17.

The order, dated June 15, extends an earlier ruling issued in May that bars the East African nation from securing new prepayment contracts involving its Dar Blend and Nile Blend crude oil grades pending further court proceedings.

The case stems from a dispute between South Sudan and BB Energy over oil cargoes purchased under prepayment arrangements in 2024 and 2025.

Prepayment agreements are commonly used by oil-producing countries facing financial pressures, allowing governments to receive funds upfront in exchange for future crude deliveries.

In a statement, BB Energy welcomed the court’s decision, saying the injunction would prevent South Sudan from accepting additional advance payments for crude oil while the dispute remains unresolved.

“BB Energy welcomes the High Court’s decision to continue the injunction preventing the Republic of South Sudan from accepting any further prepayments for crude oil and prohibiting third parties from facilitating such arrangements,” a company spokesperson said.

The trader also disclosed that it had received irrevocable letters of award from the South Sudanese government for two crude oil cargoes scheduled for delivery before November.

The company expressed optimism about future engagements with the government, saying it looked forward to continuing commercial discussions regarding additional deliveries.

BB Energy initiated legal proceedings in London’s courts last year, alleging that South Sudan failed to deliver oil cargoes purchased under the prepayment arrangements.

According to the company, it received its first cargo under the disputed agreements in February this year.

The latest ruling is expected to complicate South Sudan’s efforts to secure fresh financing through future oil-backed transactions, a mechanism that has been widely used by resource-rich but cash-strapped governments.

Oil revenues account for the vast majority of South Sudan’s export earnings and government income, making crude production central to the country’s economic stability.

The court’s decision means the government will be unable to enter into new prepayment arrangements involving its key crude grades until outstanding issues with BB Energy are resolved or the injunction is lifted following future hearings.

Neither the South Sudanese government nor its legal representatives immediately commented on the ruling.

The case highlights the growing scrutiny surrounding oil-backed financing arrangements and the legal risks associated with disputes over commodity deliveries in international markets.