U.S. Slaps South Sudan Oil Companies With Restrictions

(Bloomberg) -- The U.S. identified 15 oil-related entities in South Sudan that it accuses of helping to fund violence, and implemented measures that were shrugged off by the war-torn country.

The restrictions mean companies such as state-owned Nile Petroleum Corp. will face barriers to importing U.S. equipment. The move against South Sudan -- in the grip of civil war and at risk of famine -- is an effort to curtail cash flows to militias, which Global Witness says are funded by revenue from such firms.

Those on the list face “a license requirement on all exports, re-exports, and transfers of any U.S.-origin items to those entities,” the U.S. government said in an online statement.

“The listed entities are a source of substantial revenue for the government of South Sudan,” which uses the money to purchase weapons and fund militias, the U.S. Department of State said in a separate statement.

South Sudan’s Petroleum Ministry dismissed the measures, saying production would still increase.

Oil output is 135,000 barrels a day and is “going up,” Petroleum Minister Ezekiel Lul Gatkuoth said. The effect of the steps taken by the U.S. "is zero affecting the production,” he said.

Government Included

The list also included South Sudan’s petroleum and mining ministries themselves, and private firms. It named Oranto Petroleum International Ltd., a closely held Nigerian business that announced a plan last year to invest $500 million in South Sudan, among the affected companies.

Measures restricting the import of U.S. technology “are viewed by the Ministry of Petroleum as counterproductive” to bringing peace and stability to the country, the ministry said in a statement. It’s “nevertheless committed to resolving this situation and improving the trading relationship.”

South Sudan plans to increase oil output to 175,000 barrels a day once production resumes at its shuttered northern fields, according to the oil minister.

A spokesman for Oranto declined to comment. Calls to Nile Petroleum didn’t connect and emailed questions weren’t delivered because the address the company gives on its website “couldn’t be found,” according to the message that bounced back.

To contact the reporters on this story: Okech Francis in Juba at fokech@bloomberg.net, Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net.

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Amanda Jordan, Rakteem Katakey

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