London court lifts freeze on South Sudan oil cargo in $100m debt dispute

LONDON – The High Court in London has discharged an interim injunction that had prevented the Government of South Sudan from loading and selling a 600,000-barrel cargo of Dar Blend crude, clearing the way for the shipment to proceed from Port Sudan just hours before its scheduled lifting.

The ruling brings temporary relief to the world’s youngest nation, which relies on oil for more than 90 per cent of its budget revenue, but leaves unresolved a much larger claim by Dubai-based commodity trader BB Energy for approximately $188 million in alleged unpaid fuel financing.

Mr Justice Christopher Butcher had granted BB Energy an urgent ex-parte worldwide freezing order on 18 November after the trader argued that South Sudan and its state-owned Nile Petroleum Operating Company (Nilepet) had diverted multiple oil cargoes to third parties in breach of a February 2024 prepayment agreement.

Under that facility, BB Energy advanced around $100 million against the delivery of five cargoes of Dar or Nile Blend crude. In his 18 November judgment, the judge noted “good grounds for thinking that neither defendant has the funds to meet any judgment” for the value of the blocked cargo, which he estimated at more than $20 million.

To balance the risk of hardship to South Sudan, the court required BB Energy to post a $25 million bank guarantee covering potential demurrage, storage and handling costs. At a return-date hearing on Wednesday morning, however, the court lifted the injunction, allowing the cargo – reportedly sold to either Dubai’s EuroAmerican Energy or Singapore’s Cathay International Petroleum – to load as planned.

Sources familiar with the proceedings said BB Energy did not oppose the discharge provided its broader claim remained intact and the undertaking in damages stayed in place. A spokesperson for BB Energy declined to comment on the latest ruling but reiterated that the company “continues to pursue all available remedies” for the alleged diversion of assets and non-delivery of crude under the financing agreement.

South Sudan’s Ministry of Petroleum and Nilepet did not respond to requests for comment and have not entered an appearance in the London proceedings to date as new leaders appointed by President Salva Kiir assume their duties at the respective institutions this week.

The case is the latest in a string of oil-backed financing disputes involving Juba. Industry estimates place the country’s outstanding prepayment obligations to commodity traders and Middle Eastern funds at around $2.3 billion, with creditors increasingly turning to European courts to protect their security.

Legal sources said the swift discharge of the injunction – just nine days after it was granted – reflects the court’s sensitivity to the humanitarian and economic consequences of blocking a sovereign state’s primary revenue stream, even while acknowledging the strength of a creditor’s proprietary claim over specific cargoes.

The substantive claim for $188 million, which includes accrued interest and damages, is expected to proceed to a full trial in 2026 unless settled.