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South Sudan faces London court case over oil-backed loan

According to court documents and a spokesperson for the company, trading house BB energy has filed a lawsuit against South Sudan over its failure to deliver oil owed as part of a prepayment agreement.

South Sudan, one of the world's poorest nations, has been through two civil wars over the last 15 years. It is also struggling with a fragile peace agreement and increased debt. In March, South Sudan's government put its petroleum minister and other officials under house arrest.

Court records show that BB Energy DMCC brought the case in last month. The company spokesperson said the case was filed to protect BB Energy’s rights under a deal with the Ministry of Petroleum.

The spokesperson stated that "they have not yet delivered." We are in the process serving formal proceedings, but we are always trying to find a peaceful solution.

South Sudan officials did not respond immediately to a comment request on this case.

In May, oil trader Vitol filed a lawsuit in London against South Sudan. However, it said that the matter had been resolved. According to sources, the case was about a single oil cargo that had been cancelled.

A London court ordered South Sudan in May to pay Afreximbank 657 million dollars for defaulted loan. IMF estimated South Sudan's public debt to be $3.7 billion by 2023. Of that amount, $550 million was owed to oil companies.

South Sudan's crude production peaked at between 350,000 and 400,000 barrels a day before the civil conflict. But that fell to only 72,000 bpd in 2013, according to OPEC, when a damaged pipeline halted oil exports.

The pipeline resumed operation in June and the country produced 138,000 bpd during that month. (Reporting and editing by Kate Mayberry; Additional reporting by Sam Tobin, Robert Harvey, and Libby George)

(source: Reuters)