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JOHANNESBURG (Bloomberg) -- Nigeria’s Oranto Petroleum International Ltd. plans to bet half a billion dollars that Africa’s newest nation can end a three-year civil war and create the conditions to revive its oil industry.

Oranto, a closely held company part-owned by the Eze family that also has assets in Equatorial Guinea and Nigeria, plans to invest $500 million to develop the oil block awarded by South Sudan earlier this month.

“We have faith that the differences in South Sudan will be brought to an end and that our exploration campaign will move smoothly,” said Oranto Chairman Prince Arthur Eze. “Over the medium to long term as South Sudan develops, security becomes stronger and export options increase, we expect the price of producing and operating in South Sudan to go down.”

South Sudan is bidding to double crude production that plunged by at least a third to about 130,000 bpd since conflict erupted in December 2013. That decline, combined with a drop in prices, saw the economy contract by about 13% last year, according to International Monetary Fund. While the war has claimed tens of thousands of lives and oil workers face the risk of kidnapping, the government is telling investors not to worry about security.

“The responsibility of Oranto is to bring investment and the responsibility of the government is to make sure that we protect their investment and the environment that they will be operating in,” Petroleum Minister Ezekiel Lul Gatkuoth said in an interview. “The president made it clear that protection is our number one priority.”

Oranto, along with sister company Atlas Petroleum International, holds licenses in 10 African countries. The company would consider partnerships with other operators to share infrastructure in South Sudan and is open to working with the government on a pipeline, said Eze.

Good fundamentals

“In South Sudan we have a chance to work on an acreage that has been under-explored, but according to our assessments of the data, the fundamentals are extremely good,” he said in an emailed response to questions. “How exactly the work will be funded and where the money will be spent depends on our initial data acquisition and processing, and over the longer term, on the partnerships we make for this venture.”

While Exxon Mobil Corp. ended its plans to explore South Sudan with Total SA in 2014, the country has entered a partnership with Equatorial Guinea as part of its effort to revive oil and gas projects. Gatkuoth said all motivated companies are welcome and has set deadlines for Total and Tullow Oil Plc to move forward with their plans in the country.

“Anybody who is willing to do business with us, they must actually show that they are ready and we will sign,” he said. “And if you are not ready to do business with us, get out of the way.”

The country uses two pipelines that transit neighboring Sudan to ship its oil to Port Sudan on the Red Sea. While the government has revised an agreement with Sudan on the amount it pays to transport its crude exports, other routes may become available, according to Eze.

Pipeline options

“The government is working on agreements with neighboring countries to increase the options for crude exports, so early production could be sent to Ethiopia using new roads currently being planned,” he said. “Pipeline exports through neighbors to the south and east are an option for the future.”

To the south-east, neighboring Uganda and Kenya are developing two separate pipelines over the next few years to export crude from new inland basins to ports on the Indian Ocean.

Until July, the conflict in South Sudan was mostly concentrated in areas such as Unity and Upper Nile in the country’s oil-rich north -- the traditional home of the Nuer community, many of whom backed former V.P. Riek Machar’s rebellion. That changed after violence flared in the capital and a short-lived government in which Machar shared power with President Salva Kiir collapsed. 

This month widespread violence in the country has included abductions of oil workers and the killing of humanitarian staff. More than 3 million people have been forced from their homes since the war began, with about 1.5 million sheltering in neighboring countries.