South Sudan Should Empower Local Companies in the Upstream Petroleum Sector
By Jacob Majok Anthony
As South Sudan continues to evolve in its post-conflict development journey, its vast natural resources offer a significant opportunity to accelerate sustainable development through economic activity and resource exploitation, which ultimately will contribute to stability and peace efforts.
According to a 2022 World Bank report, South Sudan’s oil sector accounts for about 90% of government revenue making it a central pillar to the country’s growth. However, the industry has been largely dominated by far-off companies, leaving local enterprises with limited activity in the sector directly or indirectly. In this article, I argue that for South Sudan to secure sustainable development, empower communities, and ensure the youngest nation’s prosperity, our country must prioritize empowering local companies in the upstream sector of the oil and gas industry.
This will be the surest way to realize tangible and accelerated economic benefits including fostering independence from development-humanitarian aid as well as external debt. Currently, much of the revenue generated from South Sudan’s oil reserves ends up leaving the country through operational costs, debt repayment, and other costs leaving little room for the funds to be used locally through employment, procurement through local content, and social programs that directly benefit communities.
Investing in local companies in the upstream sector directly contributes to job creation and skill development. The oil industry is highly specialized, requiring skilled professionals in areas such as geology, engineering, drilling, and environmental management. Unfortunately, currently, many of these roles are filled by expats, with minimal transfer of knowledge to South Sudanese professionals.
In contrast, local firms have a vested interest in reinvesting profits into the national economy, and this can create a self-reliant system that prioritizes South Sudan’s growth. A classic example, Trinity Energy has emerged as one of the few leading South Sudan-indigenously-owned energy companies with a leading presence in the oil sector and has pioneered a promising opportunity for economic self-reliance as evidenced by its downstream success. With its roots embedded locally, the local company is well-positioned to stimulate ancillary industries, creating a ripple effect of economic benefits. Supporting local companies like Trinity Energy through favorable regulations, political goodwill, and social capital will help this localization campaign. By investing in the local workforce, such firms can train South Sudanese engineers, technicians, and managers, ensuring that they acquire the necessary expertise to lead the country’s most lucrative sector. In turn, this will not only reduce unemployment but also build a pool of highly skilled professionals who can contribute to other sectors of the economy.
Additionally, local companies are more accountable to the government and the public, enhancing transparency and reducing the chances of exploitation. Furthermore, building a strong local presence in the upstream sector will mitigate the risk of overdependence on foreign firms, enhancing the country’s bargaining power and securing its long-term energy security. This is in addition to the stronger local connections to the communities they operate. Thus, by empowering local enterprises, South Sudan has an opportunity to create a more inclusive and socially responsible oil industry. Local firms can foster better relationships with communities, minimizing conflict and ensuring that the wealth generated from oil production benefits all South Sudanese.
Empowering local companies ensures that the country’s oil industry develops in a way that pays back both the environment and its people. Companies like Trinity Energy have already shown a commitment to corporate social responsibility and sustainable practices, making it a valuable partner in building a more responsible oil industry. Local companies are more likely to prioritize long-term sustainability over short-term gains. By investing in environmentally responsible practices, local firms can help protect South Sudan’s ecosystems while maintaining oil production.
South Sudan’s potential for economic growth lies in its oil sector, but for this potential to be fully realized, local companies like Trinity Energy must be empowered to take a leading role in the upstream sector. By doing so, South Sudan will foster economic independence, create jobs, enhance national security, and ensure that the benefits of oil production reach all its citizens. Empowering local companies is not only a matter of economic necessity but also a pathway to sustainable development and prosperity for the country.
