Savannah Energy has terminated its previously announced $1.25bn acquisition of the South Sudan oil and gas assets of Malaysian state-owned oil and gas company Petronas.
The parties were unable to finalise agreeable terms, leading to the cancellation of the deal.
The intended acquisition, announced in December 2022, involved Savannah Energy acquiring Petronas Carigali Nile (PCNL). This would have allowed the British energy company to control substantial operations across three joint operating companies (JOCs) in South Sudan.
These operations, which began production in 1999, include interests in Blocks 3/7, 1/2/4, and 5A. They produced an average of 153.2 thousand barrels of oil per day in 2021.
If the acquisition had been completed, Savannah Energy would have acquired a 40% stake in Blocks 3/7 and a 30% stake in Blocks 1/2/4. Additionally, the Africa-focused company would have secured a 67.9% stake in Block 5A.
Overall, the transaction included interests in 64 producing fields.
Petronas has opted to withdraw from its exploration and production sharing agreements in South Sudan, aligning with its strategy to focus on investments that match its long-term objectives.
The Malaysian firm stated: “The decision was made following a two-year period of divestment initiatives in alignment with Petronas’ long-term investment strategy amid the changing industry environment and accelerated energy transition.”
Savannah Energy, on the other hand, said that it remains in discussions about a possible alternative transaction to acquire the Petronas assets.
Any new deal would be considered a reverse takeover under AIM Rule 14 and would require shareholder approval, keeping the British firm’s shares suspended on the AIM until further details about the transaction are published.
Savannah Energy said that updates on this development and associated matters are expected by early September. Meanwhile, PCNL plans to coordinate with stakeholders to manage its exit responsibly, adhering to legal requirements and corporate policies.
