Probe Opened as Hijacked Petronas Exit Deal Costs South Sudan $600m in Lost Oil Revenue

A high-stakes probe has been launched in South Sudan’s oil sector after investigators concluded that a botched takeover of Petronas assets has bled the country an estimated $600 million in lost revenue, deepening a fiscal crisis marked by unpaid salaries and widening deficits.

The investigations, initiated after the appointment of Emmanuel Athiei Ayual as Nile Petroleum Corporation managing director and Dr Chol Thon Abel as Secretary General at the Ministry of Petroleum in November 2025, are now tracing what officials describe as systemic governance failures and possible institutional capture under the previous administration.

At the centre of the scandal is the stalled acquisition of Petronas’ stakes in South Sudan’s oil blocks, a deal originally sanctioned by President Salva Kiir and billed as a national game-changer. When Petronas announced its exit on August 7, 2024, it held major interests across all three national oil consortia, including 40 per cent of DPOC, 30 per cent of GPOC and a controlling 67.8 per cent of SPOC. The buyback was designed to give the state immediate control of producing assets without upfront capital, with payments structured against future oil output.

Fifteen months later, the ownership transfer remains incomplete. Arbitration proceedings initiated by Petronas at the International Centre for Settlement of Investment Disputes are still ongoing, while officials estimate the country has already forfeited about $600 million that should have flowed to the Treasury from production-linked revenues.

Sources within Nilepet and the Ministry of Petroleum insist the problem was not the deal itself. Instead, they point to paralysis that set in after operational oversight shifted to then Vice President Benjamin Bol Mel, former Petroleum Ministry Secretary General Deng Lual Wol and former Nilepet chief executive Ayuel Ngor Kacgor. Approvals stalled, timelines slipped and international partners were left in limbo, even as oil continued to flow with little benefit to the state.

Senior officials privately describe the situation as economically irrational. With public servants enduring months of salary arrears, they argue that unlocking revenue from producing assets should have been an urgent priority. “This was meant to generate cash immediately,” said one official involved in the negotiations. “Instead, we imposed austerity while money sat trapped in administrative deadlock.”

Attention has also turned to the role of foreign partners. Multiple sources accuse Chinese state firms CNPC and Sinopec of refusing to grant key technical and operational approvals required to complete the transfer, effectively blocking the deal. Their stance contrasts with India’s ONGC and Egypt’s Tri-Ocean Energy, which have supported the takeover.

China’s dominance in South Sudan’s oilfield services sector, from drilling to logistics, has given it outsized leverage over production decisions. Policymakers now warn that this influence has become a structural threat to South Sudan’s economic sovereignty, allowing external actors to dictate the pace at which national revenues are realised.

Investigators are further examining controversial consultancy payments made during the period. A Dutch national, Cornelis Nicolaas Abraham Loos, a reported associate of former Nilepet CEO Ayuel Ngor Kacgor, is said to have been hired on a $100,000-a-month contract while nearly 3,000 Nilepet workers went unpaid for months, triggering strikes in June 2025. Authorities are probing whether Loos or linked entities had commercial interests in Chinese oilfield service companies, potentially shedding light on inflated contracts, rising operating costs and declining output.

The probe has also exposed what officials call a shocking lack of professional safeguards. While Petronas relied on top-tier international law firms and financial advisers, Nilepet allegedly engaged no reputable external counsel or investment bank. Negotiations over assets worth hundreds of millions of dollars were reportedly conducted in hotel rooms in Dubai and Nairobi, with thin documentation and little institutional oversight.

To make matters worse, investigators say key contracts were destroyed or removed by former officials, leaving the current leadership without access to crucial agreements. Although Ayuel Ngor Kacgor was dismissed in November 2025, he is believed to still sit on boards of operating companies registered in Mauritius and to receive remuneration linked to legacy arrangements.

The political backdrop has sharpened scrutiny. On November 12, 2025, President Kiir dramatically sacked Vice President Benjamin Bol Mel, stripped him of his general’s rank, demoted him to private and placed him under house arrest in Juba. Yet fundamental questions remain unanswered: where did the international financing for the acquisition go, who authorised the lavish consultancy fees and why the transfer remains stalled nearly 18 months after Petronas walked away.

The crisis fits a broader pattern. The UN Human Rights Commission estimates that about $25.2 billion in oil revenues generated since independence in 2011 remain almost entirely opaque in their use, fuelling public anger and mistrust.

Now, a new leadership team led by Petroleum Minister Dr Bak Barnaba Chol, Emmanuel Athiei Ayual and Dr Chol Thon Abel is racing to untangle what insiders describe as a toxic legacy. They face missing paperwork, legal disputes, operational disruptions at the Heglig oil field and what they believe is deliberate obstruction by entrenched interests.

For many in South Sudan’s energy sector, finalising the Petronas–Nilepet deal is still within reach and could mark a turning point by restoring revenue flows and reinforcing national sovereignty. Until then, the country remains trapped between reform efforts and the heavy cost of past mismanagement, with hundreds of millions of dollars still locked out of reach.