South Sudan Sued Over Oil Delivery Failure Despite Upfront Payment

(LONDON) – South Sudan is facing a second lawsuit in a London court, this time filed by global energy trading company BB Energy, over a failed oil delivery agreement under a prepayment deal, according to court documents and statements from the company.

BB Energy DMCC initiated legal proceedings last month after the government of South Sudan reportedly failed to deliver oil promised under a supply contract with the Ministry of Petroleum. A company spokesperson told Reuters that the legal action was necessary to preserve their rights under the agreement.

“As yet, they have defaulted on delivery,” the spokesperson said. “We are currently in the process of serving formal proceedings. However, we are always looking to find an amicable solution, especially considering our long term interests in the country.”

The South Sudanese government has not yet issued a response to the court filing.

This is not the first case of its kind. In May, oil trading firm Vitol filed a separate lawsuit in London, also involving an oil cargo dispute with South Sudan. That case was later resolved privately, with sources indicating it concerned a single cancelled shipment.

The country’s troubled oil sector has come under increasing scrutiny as financial and operational challenges mount. In May, a London court also ordered South Sudan to pay the African Export-Import Bank (Afreximbank) a total of $657 million (approximately 3.02 trillion South Sudanese Pounds at the current rate of $1 = 4,600 SSP) over defaulted loans.

According to the International Monetary Fund (IMF), South Sudan’s public debt stood at $3.7 billion as of 2023. Of that, about $550 million is owed specifically to oil companies.

The country, still recovering from years of civil war and struggling with a fragile peace agreement, has faced repeated difficulties in meeting its international financial obligations.

Crude oil is South Sudan’s main source of revenue, but production levels have dropped sharply in recent years. Before the outbreak of civil conflict, the country produced between 350,000 and 400,000 barrels per day (bpd).

However, in 2024, output dropped to just 72,000 bpd due to the shutdown of a major export pipeline. The pipeline resumed operations in June 2025, and production climbed back to 138,000 bpd that month, according to figures from the Organization of the Petroleum Exporting Countries (OPEC).

South Sudan has used oil backed loans as a way to access cash quickly, often pledging future crude deliveries in return for upfront payments. While this provides short term financing, such deals have increasingly resulted in legal challenges when the government fails to honour the terms.