1 July 2018

Sudan: Enter the Oil Factor

Photo: Daily News
Liquefied Petroleum Gas.
analysis

Many have lost count on the number of peace deals signed between South Sudan warring factions. And the question usually asked after yet another concluded peace agreement is how long it will last.

Yet last week's 6-point Khartoum Declaration looks a bit different though it was the same war lords, the same main deal outline, the same IGAD umbrella that has pushed for a starter meeting in Addis Ababa just five days earlier and was threatening punitive measures, backed by the international community, against those dragging their feet.

It is the oil factor that is making the difference. Moreover, it highlights one of the major ironies of the political landscape, where Sudan accused of maltreating its citizens of what was greater Sudan to the extent of pushing them to vote remarkably to cede and set up their own independent young state back in 2011. But despite long history of animosity and suspicions, Sudan becomes the trump card because it enjoys a commanding position in a vital field that no other mediator has: the oil factor.

Oil revenues constitute 98 percent of the income that enters the coffers of the South Sudan government. More important Sudan enjoys a first-hand experience in dealing with various oil-related issues in South Sudan even to the extent that Khartoum knowledge surpasses that of Juba.

It was Khartoum, who managed to extricate oil mainly from its fields in then was the southern part of united Sudan and shipped its first export oil cargo back in 1999. It was an achievement against all odds. Chevron, who struck oil discoveries and other western oil companies refused to take part in Sudan's efforts to tap this natural resource. At the time the civil war led by the SPLA/M was raging with a declared vow to stop such efforts to go ahead and deny Khartoum an extra income and influence. And that is why protecting these oil sites became a top priority, a goal that has been achieved with great success and provided good lessons and expertise that could be of use in implementing the recent Khartoum Declaration.

In addition there are three main factors that should be added to the argument that tips favorable on the side of Sudan. The first is the availability of technical staff with direct knowledge of oil fields there, their performance, potential etc. Current petroleum and gas minister Azhari Abdel Gadir has been working in the field himself before coming to the head office to lead the Exploration and Production Administration during the difficult and tricky times before and after the separation in 2011.

Moreover, Sudan has enough technical staff to cover the shortage and fill the gaps more than those could be provided by Juba or any other mediator. Thirdly and more important is that the only viable downstream facilities that will take South Sudan oil to world markets are available only in Sudan. The reference is to the central processing treatment facilities (CPF) in both Palouge that serves oil produced from the Upper Nile and Heglig for the one produced in Unity state, besides the two main pipeline the 1610 km that extends from Heglig to Bashayer terminal on the Red Sea and the second one extending over 1380 km and linking production area in Upper Nile with Bashayer too.

Oil has played different roles in the history of Sudan. It helped in fanning the flames of the civil war when discovered, produced and exported; it helped pushing for peace through the CPA to achieve the goal of wealth sharing; it provided an incentive for the SPLA/M to push for separation to enjoy fully its oil income in its new state. Now it is pushing for some sort of reconciliation among the war lords and basing relations with Sudan on mutual interest. The simple lesson to conclude is that there is nothing wrong with oil itself. It is the policies adopted by different players that gives it certain color at the time.

Oil has been the prize that everyone is working hard to obtain and that is why spoilers for such deal could be around the corner. Whether the futile infight of the past five years between South Sudanese war lords has provided the much needed lesson or not is yet to be seen. And with it rests the future of the Sudan initiative that will help alleviate the economic crisis gripping the two countries.

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