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Investment, Partnerships, and Local Content: How South Sudan can Become a Major Oil Competitor

Energy Capital & Power spoke to Patrick Obath, Associate Director, Adam Smith International, about creating an enabling environment for investors in South Sudan, the value of public/private partnerships for the energy sector, and how government can increase local company participation in the country.

South Sudan is prioritizing energy sector developments and investment with the goal of reducing imports and establishing a competitive sector. How can the country create an enabling environment for international investors?

Firstly, there is still an element of residual tension in South Sudan despite the great strides made in socio-political development. The quicker this tension subsides; the faster international investors will want to come into the country. South Sudan will need a period of up to five years of low tension in the country. This should be concurrent with an increase in the number of nationals returning to invest as a confidence booster and will be a catalyst for international investors to find their way into the country. Secondly, the issue of policy certainty, which is a problem for many African countries, will need to be addressed to attract international investors.

What do you feel are the primary regulatory and legal hurdles hindering investment in South Sudan?

Some of the regulations and laws in South Sudan have already been upgraded to a world class level, with the help of various supportive governments and international organizations. The regulatory and legal base across the country is good. All that is left now, is to establish and promote the requisite agencies and get them practicing properly so that people gain confidence in them. Rather than changing regulation, there is a need to effectively implement what is already legislated.

What elements should be addressed in order to increase the ease of doing business within South Sudan’s oil and gas sector?

The key areas that need to be addressed concern the rights of investors and how these rights are going to be protected; the sharing of benefits achieved from the oil and gas sector and issues concerning infrastructure that is required to actualize the earnings of the oil and gas sector. Additionally, current laws need to be looked at in detail to ensure that there is an effective plan in terms of investing, one that meets investors’ expectations. Lastly, issues regarding the process of licensing businesses need to be addressed.

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Source: AfricaOilandPower

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