State’s Strategic Fuel Fund to finance exploration in South Sudan

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CEF CEO Kholly Zono says it is estimated that the exploration will cost $48m (R708m) over six years

The Strategic Fuel Fund will use its own balance sheet to fund the exploration of an oil block in South Sudan, its parent company the Central Energy Fund has said.

The CEF says that the commercial prospects for the block are excellent and that there is a high likelihood that it will find suitable partners down the line. The block is an area surrounded by areas that are already producing oil.If a partner is acquired it may be possible for SA to offload some its equity in return for a “carried position”.

The official rationale for the project is to make SA less dependent on the fluctuating oil price by obtaining its own source of crude. However, it has been pointed out that the crude produced in South Sudan is not suitable for use in SA refineries. Mileham said he had since submitted a Promotion of Access to Information request to the department of energy only to be told that it did not have the agreement and should direct his request to the SFF. Acting chair of the SFF Godfrey Moagi said that he had written to Mileham to answer his request, although Mileham said he had not received the reply.

 

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