Nigeria's Oranto Petroleum Ltd. said March 6 it had signed an oil E&P sharing agreement with South Sudan covering the country's Block B3 and that it would spend $500 million on an exploration campaign in the area.

Africa's youngest nation almost entirely relies on oil revenue to finance its annual budget.

Production, though, has been affected by the conflict that erupted in 2013 after a political disagreement between President Kiir and his then deputy, Riek Machar, escalated into a war.

Oranto said in the first three years of its exploration program it would do airborne geophysical surveys in the 25,150-sq km block and assess existing data held by the government and former operators, among other activities.

"Oranto Petroleum will invest $500 million to develop South Sudan's Block B3, launching a comprehensive exploration campaign starting immediately," the company said in a statement.

It did not say over what timeframe the money would be spent.

South Sudan produced 245,000 barrels per day (bbl/d) shortly before war erupted in December 2013.

Production is currently estimated at 130,000 bbl/d but the finance ministry says there are plans to more than double that to 290,000 bbl/d in fiscal 2017/2018.

"We believe the petroleum resources of Block B3 are vast," South Sudan's Minister of Petroleum, Ezekiel Lol Gatkuoth, was quoted as saying in the statement, and added the government was working hard to revive the oil sector.