Sudan’s North-South oil deal feared to omit transparency terms
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By Muhammad Osman
July 11, 2011 (NAIROBI) – A fresh deal between North and South Sudan
on managing oil revenues is “highly unlikely” to contain guarantees
for transparency, an international NGO has said, warning that such
shortcoming could stoke mistrust and conflict between the ex-war foes.
JPEG - 11.8 kb
An oil rig in South Sudan’s Unity State (www.gurtong.net)
North and South Sudan, which became a fully independent state on
Saturday, 9 July, have been evenly splitting proceeds of the country’s
oil wealth under the terms of the Comprehensive Peace Agreement (CPA)
which established peace between them in 2005 after more than two
decades of civil wars.
South Sudan, whose oilfields produce over 70 percent of the two
countries’ combined proven daily output of 500,000 barrels, needs the
North’s refineries and pipeline infrastructure to transport its oil to
export terminals.
The near-total dependency of the two countries’ economies on the oil
sector leaves them with little choice but to maintain cooperation.
However, analysts say the CPA-mandated 50-50 split is unlikely to
continue.
The two sides have been engaged in protracted talks with sluggish
progress over a wide-array of issues to untangle what was once
Africa’s biggest country, including management of oil revenues.
“From everything we’ve heard, it is highly unlikely that when a new
oil deal is agreed the text will contain explicit requirements for
transparency and accountability,” Dana Wilkins of the London-based
Global Witness told Sudan Tribune.
She cautioned that “this would be a very dangerous omission, one that
would threaten to undermine the entire deal.”
Conversely, a fair and mutually beneficial deal containing guarantees
of transparent implementation “could provide a powerful incentive for
peace between the two parties,” Wilkins said.
She explained this means that “both sides, as well as the wider
public, having access to all the data necessary to verify that the
deal is being implemented fairly and to track where the revenues go.”
“Just as critical as a new deal being agreed to will be ensuring that
transparency and independent verification are guaranteed in the
implementation of the deal,” Wilkins said.
In September 2009, Global Witness released a report raising questions
on discrepancies of 9-26 percent between the oil figures published by
the Sudanese government and those published by the main operator in
the country’s oil blocks, the China National Petroleum Corporation
(CNPC).
The report, titled “Fuelling Mistrust: the need for transparency in
Sudan’s oil industry”, sparked tension between North and South Sudan,
prompting both the country’s ministry of oil and CNPC to provide
explanations which Global Witness deemed unsatisfactory in another
report published in January 2011.
(ST)
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