Politics of International Oil Companies (IOCs): Understanding PETRONAS Carigali Nile Ltd Exit From South Sudanese Oilfields

Abstract

The study has examined the politics of the International Oil Companies (IOCs), the case study of PETRONAS Carigali Nile Ltd. It does this by appraising the legal violations of PETRONAS Carigali Nile Ltd exit and farming out from South Sudanese oilfields. The study explains the politics of IOCs and particularly, PETRONAS Carigali Nile Ltd as dependent variable and independent variables such as legal violations of Petronas Carigali Nile Ltd, types of residual liabilities and responsibility of these liabilities.The study was subjected to stringent empirical literature review and the gaps in the literature were filled through fieldwork. During fieldwork, the methodology of research tools and instruments such as questionnaires and interview guides/schedules were deployed with target of 52 respondents. Persuasive and cluster type of sampling amongst the senior staff of Ministry of Petroleum (MOP), Nile Petroleum Corporation (NILEPET), Dar Petroleum Operating Company (DPOC), Sudd Petroleum Operating Company (SPOC) and Greater Pioneer Operating Company (GPOC) were applied. The study findings indicate that PETRONAS Carigali Nile Ltd has politicized and violated sections 12, 22, 23, 24, 41 & 42 of the Petroleum Act 2012. Various types of liabilities such as cost recovery audits, environmental audit, petroleum taxes, surface rentals, and cash calls should be taken care off by Petronas Carigali Nile Ltd or by a company that farms into its shares. While the study concludes that PETRONAS Carigali Nile Ltd exit and farming out has been politicized and violated the laws of the Republic of South Sudan, the study recommends that the Ministry of Petroleum should be held responsible for all the legal violations Petronas Carigali Nile Ltd have committed in South Sudan without any action. Whether Savannah Energy Ltd farms into Petronas Carigali Nile Ltd shares or not after the PETRONAS has exited, consequences should be rolled out for such violations so that no any other IOC can do it again in the near future in this volatile oil and gas industry.