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Sudan Report Finds Oil Transparency Key to Peace

   Selah Hennessy | London 06 January 2011
   An  oil  rig in the Heglig oil field near Bentiu, southern Sudan (file
   photo)

Photo: AP

   An  oil  rig in the Heglig oil field near Bentiu, southern Sudan (file
   photo)

   More  transparency is needed over Sudan oil revenues, according to the
   environmental   rights  group  Global  Witness.  The  distribution  of
   resources  in  Sudan  is  a  hot  issue  as the country prepares for a
   referendum on dividing the country between north and south.

   A  peace  deal  made  in  2005 splits Sudanâs oil revenues between the
   north  and  south,  but  that  wealth-sharing  pact  is  due to expire
   following this monthâs referendum.
   Southerners  begin voting January 9 on whether to secede from northern
   Sudan, and polls suggest independence will follow.
   Why transparency is important
   Rosie  Sharpe  from  Global  Witness  says when a new deal is made, it
   needs to be more transparent than the outgoing arrangement.
   "No  one  for sure can know exactly how much oil Sudan produces at the
   moment,â  Sharpe  said. âAnd in order for any new oil deal between the
   north  and  south  to  be able to stand the tests of time, which could
   have  disastrous  consequences for the country, that issue needs to be
   cleared up going forward."
   The  [1]Global  Witness  report  says  oil  figures  published  by the
   Sudanese  government are different from those put out by the countryâs
   largest   oil  extraction  operation,  the  China  National  Petroleum
   Corporation.
   Number gap

   The  oil  production  figures  reported by the Chinese corporation are
   between  9  -  25  percent  higher  than  the  figures reported by the
   government in the north.
   The  Sudanese government told Global Witness the gap in the figures is
   due  to  the  fact  the  China  National Petroleum Corporation says it
   reports  its  figures before water has been extracted from the oil and
   some oil is also lost in transit.
   Division of wealth 
   Three-quarters  of  Sudanâs oil is in the south of the country. But as
   Sharpe explains, dividing oil wealth will not be clear cut even if the
   south does secede.
   "If  south  Sudan were to become independent, as all the polls suggest
   is  likely,  southern  Sudan  would be landlocked and the only way, at
   least  for the next few years, that it would be able to export its oil
   would  be  through  oil  pipelines  that  run through the north of the
   country  to  the Red Sea coast and in a way that means that both north
   and  south  will  have  to  cooperate if their oil is to be exported,"
   Sharpe added.
   Quest for peace
   East  Africa  researcher  Justin Willis of Britainâs Durham University
   says  bringing more transparency to Sudanâs oil sector will be crucial
   to ensuring peace and stability in the country.
   "This  is  an  area  which  is  absolutely  shrouded in mystery,â said
   Willis. âThere are complicated special deals involving the output from
   each  of  the  fields;  it is very difficult to know how much money is
   being   paid   per   barrel,   where   exactly  the  money  is  going.
   Unsurprisingly there has been a lot of suspicion in Juba that they are
   not  getting  what  they are supposed to get and this really is a very
   major  issue for the future. If there is not transparency there cannot
   possibly be any trust over this."
   Global  Witness  says  in the future a transparent deal should see oil
   figures  regularly  published,  independent  monitors,  audits,  and a
   dispute resolution mechanism put in place.

References

   1. http://www.globalwitness.org/crudecalculationspress

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