Energy minister Jeff Radebe said South Africa will not walk away from South Sudan, as he defended a $1bn (R14.5bn) oil deal with that country which has raised eyebrows.

Radebe has denied any impropriety in the deal and said so far only R2m had been paid for travel to explore an exploration block, a pipeline and building a new refinery in South Sudan as well as a new terminal.

"South Africa took a political decision to support South Sudan in its social and economic development long before I became minister of energy," he said.

Radebe said it was not unusual for countries to have equity in oil reserves of other countries.

"To suggest that our country that was very pivotal in the creation of the new state of South Sudan should walk away, to us it appears that there are some other vested interests of some people that only South Africa must not be involved in South Sudan," he said.

Responding to a story in the Sunday Times, the minister said the accusations were malicious.

The newspaper reported that Radebe is embroiled in a mystery $1bn (R14.5bn) oil deal in war-ravaged South Sudan, but his investment pledge has raised eyebrows in government circles - and could land him in hot water.

"We believe the information is malicious and is intended to distract us from what is important and to sour our relations with our Sudanese counterparts," Radebe said.

He said the project was an effort to mitigate rising fuel prices.

"We do not have oil resources. The fuel price increases all the time. So when a government and its entities try to solve that problem some people want us to stop," Radebe said.

The Sunday Times quoted sources saying the crude in South Sudan was not suitable for SA's refineries.

When asked where the money would come from, the CEO of the Strategic Fuel Fund, Godfrey Moagi, said the project was at feasibility stage and there was a budget set aside. 

He said, "The oil market by its nature is a global market. I don't believe there are a lot of refineries that are feeding their own refineries with their own oil. It's imported and as the minister said earlier on we have options around this.

"We can take the South Sudanese crude if it does not fit with our refineries and swap it with someone who has suitable … we can trade it in the open market or we can refine it in refineries where they got compatible crude and bring finished products. As you may be aware this country imports a third of its requirements from the international markets,” he said.

Moagi, however, did not say how much has been budgeted for the feasibility study.

"If the project is viable anyone can invest," Moagi said.