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Role of Oil In Sudan

   There  are  fevered  efforts to explore for oil fields in the north as
   the  reality  of  losing some 80 percent of the southâs oil production
   and revenues looms.

   Alsanosi Ahmed | Khartoum, Sudan 31 December 2010

Photo: photos.com

   The reality of losing some 80% of the south's oil production looms big
   in Khartoum

   The  USâbacked 2005 Comprehensive Peace Agreement (CPA) brought an end
   to  the  civil war in Sudanâ¦Â  but the threat of a return to conflict
   remains  close   because  of the huge oil reserves, mostly located in
   the south, with much less in the north.

   Sudan's  ruling  National  Congress Party has always denied there is a
   link between the CPA and oil.  Recently the foreign minister of Sudan
   Ali  Karti  said  it  the   intention was to end the war, and nothing
   more.

   Khartoum  has changed a lot since the war ended. Peace has boosted oil
   production  to  a  half  million barrels a day. The generated money is
   easily visible on the streets of the Sudanese capital. Skyscrapers are
   being  built, new bridges constructed, fancy cars cruise the city, and
   foreign bank accounts are available and popular.

   Hafiz Mohammed, an analyst based in Khartoum, thinks that oil is a key
   part of the CPA.

   "I  think  the oil is one of the main factors which actually influence
   the  whole CPA or the comprehensive peace agreement, because it is the
   main source of income for the north and south," says Mohammed.

   "The  north  has  other resources but the oil is still a major factor,
   that  is why they have the wealth sharing protocol which addresses the
   issue  of  how  to  divide  the  proceeds  of  the oil sale," Mohammed
   explains.

   Southern  Sudanese hold pro-independence banners as they march through
   the streets of the southern capital Juba, 09 Oct 2010

AFP

   The  south  is  expected to ovewhelmingly vote for seperation from the
   north  in  January's  referendum.   According  to Mohammed, secession
   could have a very severe impact on the northâs economy,

   He  says  the  north  is  going  to  face problems, there is no way of
   denying  that.  "The north," he says, " is going to loose at least 50%
   of  its  income  which  in  turn  will   affect  the foreign currency
   proceeds  which  in  turn will  affect the value of the currency (the
   sudanese  pound)  which  will  then have a devastating impact on Sudan
   generally."

   Another  analyst,  Alhajj Hamad, blames the government for putting the
   oil money in the pocket of officials and not preparing the country for
   the  likelihood that the south might decide to seceed. The citizens of
   the  north  never had a share in the oil revenue,  the oil  directly
   went  into  the  coffers  of  the government to expand securityand the
   military  apparatus.  Hamad  says, "in the last six years  35% of the
   annual budget was for security and defence."

   The  vice-presidents  of  the north and south, Ali Osman Taha and Riak
   Machar,  agreed  last month to jointly guard the oil fields before and
   after  the  refrendum  to  help guarantee the oil revenues. Hamad says
   there  are  plans  in  place to to hand over the control of the fields
   from the north to the south.

   "It  is  very  clear  that in the post referendum period, there is one
   initiative by the current Minister of Energy in which he has suggested
   a  slow  paced handover for the south.  As you know on the referundum
   vote,   it  is   mostly expected the south will go for a separation.
   Then  six months after the referendum they are supposed to have a kind
   of an action plan for a handover," explains Hasmad.

   The  agreement  of  the two vice presidents might be the first step to
   in-corparate  the regions. Both depend on each other, one doesnât have
   oil and the other doesnât have pipelines to export the oil.

   Sudanese Vice President Ali Osman Mohamed Taha (File Photo)

AP

   Sudanese Vice President Ali Osman Mohamed Taha (File Photo)

   Some  northerners  are  not  worried  about  the southâs secession. As
   president  Omar  Bashir  pointed  out  recently,  the  effect  of  the
   seperation would be minimal.

   Umeima  Ahmed   an  NCP  member of parliament says proudly, that the
   north lived without oil before and can again.

   "The oil has been just discovered five years ago, we were managing our
   lives  before  that.  Now we will look for other alternatives, we have
   gold  and  vast  lands  with water to farm on, let the southhave their
   oil," Ahmed asserts.

   The  north  has expanded its farming sector and currently is exploring
   for  more oil in the western region of Darfur. According to Hamad, oil
   means more political problems in a nation already suffering because of
   oil.

   She  says,  "already  in  the  oil  fields  of  South Darfur, there is
   production  of  30,  000  barrels  a day.  Surely, we should not feel
   happy  because  of   the experience of the south.  With oil there is
   more  political  instability, and now with 30,000 barrels in Bileil in
   South Darfur simply means 30,000 political problems," she says.
   The  senior  member of NCP and the head of the energy committee in the
   national  assembly, Mohammed Abdallah Musa, says oil production in the
   north will double.

   "Our  aim  in  the  coming period is to expand our exploration, " Musa
   says  "  because  we  donât  want  more troubles connected oil. We are
   satisfied, and ready to accept having a new  neighboring nation."

   Whether that will remain true once southern oil revenues dry up is one
   of  the big question marks hanging over the outcome of the referendum,
   and the end of the CPA.

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