Panel says transactions raise concerns, as the government had earlier pledged that oil exports would be directed toward clearing arrears on outstanding debts secured against future production

By The City Review

South Sudan’s government secured more than US$731 million through oil sales under new pre-payment arrangements in the first ten months of 2025, even though it had previously committed to using crude revenues to settle existing oil-backed loans, according to a new report from the UN Panel of Experts on South Sudan.

As cited in the report published by Global Trade Review (GTR), authorities sold 22 cargoes of Dar and Nile blend crude between January and October 2025. Under short-term agreements, each cargo generated advance payments ranging between US$25 million and US$30 million, bringing the total value received to over US$731 million.

The panel noted that the transactions raise concerns, as the government had earlier pledged that oil exports would be directed toward clearing arrears on outstanding debts secured against future production. Instead, the report shows that new pre-payment deals were struck, effectively creating fresh financial obligations while older debts remain unpaid.

The findings highlight ongoing challenges in the management of the country’s key resource, with oil revenues continuing to form the backbone of the national economy but also central to repeated concerns over transparency, debt sustainability, and adherence to prior financial commitments

According to the UN Panel of Experts, such arrangements limit the government’s flexibility in managing public finances and reduce the volume of oil available to service long-standing liabilities, potentially worsening the country’s debt profile.

The report is expected to be presented to the UN Security Council later this week, drawing renewed attention to fiscal management and resource governance in South Sudan.

Court injunction

Mid last month, a London court barred South Sudan from entering into new pre-payment deals for oil exports or pledging future oil cargoes to secure financing, in the latest escalation of commodity trader BB Energy’s efforts to recoup a US$100mn debt.

The order, issued on May 15, said South Sudan “must not accept any new pre-payments or enter into any arrangement that has the effect of being a pre-payment, from any third party in relation to any cargo of Dar Blend or Nile Blend crude oil” before a further hearing on June 5. The order also demands that the country not incur debt secured against oil cargoes.

Oil exports are South Sudan’s primary source of revenue. In recent years the civil war-wracked country has taken on several loans from banks and commodity traders that were supposed to be repaid by delivering oil cargoes to lenders.

In November last year BB Energy won a separate court order that prevented South Sudan from selling one cargo that was due to be lifted from a Sudanese port. The trader claimed the shipment should have been used to repay part of a US$100mn loan it provided to the cash-strapped country earlier in the year.

The latest order goes further by covering all the government’s cargoes and warning South Sudan that if it disobeys the order “you may be held to be in contempt of court and may be fined or have your assets seized”.

It adds that any other person who is aware of the order yet helps South Sudan breach it, may also be held to be in contempt of court and may be “imprisoned, fined or have their assets seized”.

The latter provision is designed to deter other traders and banks from facilitating pre-payments for South Sudanese oil, a person familiar with the case said.