l'informazione ufficiale vuole che il petrolio sudanese venga comprato in gran parte dai "cinesi". Ecco la realtà dei contratti petroliferi sudanesi, e gli sviluppi che prefigurano, come si può osservare gli occidentali fanno la parte del leone, nonostante i media continuino bellamente ad ignorare la questione. Non sono presenti aziende Usa in quanto il Sudan è nella lista dei paesi sotto embargo unilaterale statunitense.

al-jazeera_humour.jpg, image/jpeg, 401x251

Il Sudan in 3/4 anni dovrebbe raggiungere la produzione si un milione di barili al giorno, che vale più dell'1% del mercato mondiale.
Se si considera che ora produce sui 350.000 barili, la previsione che vede la produzione triplicare in pochi anni è chiaramente fondata su una serie di contratti e progetti gia sul campo.
E' stato ammesso all'Opec come paese osservatore.

Le principali compagnie coinvolte sono :
-la Lundin Oil AB svizzero/svedes
- la OMV Aktiengesellschaft, dall' Austria
- la Talisman Energy Inc, Canada, presente in Sudan tramite una sussidiaria olandese, che subisce pressioni in patria e finge di volersi disfare delle concessioni.
- la Petronas malesiana
- la China National Petroleum Company (CNPC), cinese.


In più Elf-TotalFina, Francia, ha una concessione di 120.000 km2 nel Sud del paese per il greggio del Nilo Blu, e la BP (inglese) ha grossi interessi nella compagnia cinese PetroChina, sussidiaria della CNPC che opera nel paese su 72.000 km2, pertanto si può dire che sia al 50% con i cinesi.

La Exxon-Royal Dutch Shell, fornisce il carburante a tutto l'apparato statale ugandese, anche se ha dichiarato che non fornirà più il carburante per gli aerei usati per bombardare la popolazione civile, dopo le pressioni di gruppi pacifisti.
La russa Stroitransgaz costruirà un oleodotto di oltre 300 kilometri.
Altri 700 kilometri se li è aggiudicati una ditta indiana, la ONCG.
L'india possiede diritti estrattivi sul Grande Progetto del Sud Nilo (nuovi campi estrattivi), che cerca di scambiare con altri, ha proposto lo scambio ai nigeriani che hanno rifiutato.
Nel contempo però pare combattuta e cerca di accaparrarsi comunque la quota che la Total Fina vorrebbe vendere per la scarsa fiducia sulla sicurezza delle aree.
Tutte le compagnie sono insicure, alcune meno di altre, vedi Petrochina e Lundin.

a questo link:
http://www.lundin-petroleum.com/eng/sudan.shtml

la Lundin Oil da notizia della scoperta di 2/3 miliardi di barili di petrolio in una sola concessione.
A titolo di esempio le intere riserve statunitensi sono valutate in circa 30 miliardi di barili.

Una concessione simile, il "Block six", si trova nel Sud del Darfur, area non inclusa negli accordi di pace.

La stima delle riserve sudanesi cresce ogni anno con il prgredire delle esplorazioni.

La mappa mostra come guerra e petrolio in Sudan siano strettamenti connessi.

Perchè la nostra stampa continua a parlarci di predoni?

Perchè contestare il dittatore vorrebbe dire guastare i piani perseguiti finora, meglio prendersela con i "predoni", loro sono "selvaggi", non "civilizzati" come noi occidentali.
Gioca a favore del mantenimento del mistero il fatto che le estrazioni siano cominciate solo nel 1999 e pertanto il paese non viene ritenuto"tradizionalmente" tra i produttori di petrolio.
E' anzi il paese più povero del mondo, ultimo in tutte le classifiche.

A questo link altre mappe e notizie sulla situazione nel paese e nel Darfur.
http://italy.indymedia.org/news/2004/08/596579.php

Qui il sito che si batte contro la guerra petrolifera in Sudan:
http://www.ecosonline.org/
proteste che hanno ottenuto finora risultati minimi.
Altro gruppo:
http://www.vigilsd.org/fcarte6.htm
http://www.vigilsd.org/faccueil.htm

dittatore.jpg, image/jpeg, 280x350

Dittatore golpista e pure un pò talebano, apparentemente genocidario, ma se firma i contratti allora diventa simpatico.

petrowar..jpg, image/jpeg, 500x692

Questa mappa mostra, anche visivamente, come guerra e petrolio in Sudan siano strettamenti connessi.

http://southsudanfriends.org/issues/oil000614.html


Oil in Sudan
June 25, 2000
The Problem
If oil is discovered in your backyard, that is ordinarily cause for rejoicing. Not so in southern Sudan. There, oil has been not even a mixed blessing-- it is a curse. Because of the oil, the Khartoum government has preferred anarchy to local government in southern Sudan. To the extent that the oil has actually generated revenue, that revenue has been used up in the war, along with many lives of both northern and southerners. The South has lost the schools it once had and gained nothing but the roads and pipeline needed to remove the oil. If the oil suddenly disappeared, Sudan would be a far happier country.

South Sudanese Friends International (SSFI)
Email@southsudanfriends.org
Web Address of this report: http://southsudanfriends.org/issues/oil000614.html




The biggest problem is that oil has created an incentive for the Khartoum government to oppress southern Sudan. The first civil war in Sudan was ended by the Addis Ababa Agreement of 1972. This agreement was known worldwide as the textbook example of a successful resolution to a civil war. Southerners accepted that Sudan was a united country, in which the northerners would inevitably control national and international policy because of their majority of population and wealth. Northerners accepted self-rule for the south, including allowing the south to have a freely elected government even thought the North continued under the Nimeiry dictatorship. The situation was not perfect, as Sudan continued to have the same problems of poverty and corruption as most African countries, but at least there was peace and a reduction in complaints of northern colonialism.

Oil disrupted this equilibrium. After it was discovered in the late 1970's, President Nimeiry decided to break the Addis Ababa Agreement. He announced that the oil would not be refined in the south, dissolved the southern elected government, split the south into three provinces, and in 1983, in a surprise move, imposed Islamic law on all of Sudan. The point of Islamic law seems to have been not so much religious as to please northern factions that Nimeiry previously had not thought worth conciliating at the expense of southern support. If he was going to ruin his relations with the south by taking all the oil, he might as well please some people in the north by imposing Islamic law. In addition, if Sudan was an Islamic state, non-Moslems would be denied political positions-- and so southerners would be denied any influence on how the oil money would be spent.

Predictably, civil war broke out in 1983. Southern army units mutinied, the tribes armed themselves and created new militias, and Marxist Ethiopia seized the opportunity to support rebel groups. This was not a conventional war of north against south, however, but a war with many sides, of which the northern army was only the most powerful. The northern regime armed Arab and southern militias and bandits, and the southerners themselves were organized in numerous groups, varying in their motives from a desire for freedom, lust for power, Marxist ideology, defense of the local village, and simple banditry. This war has continued to the present time.

The importance of the oil is in two things. It seems the Khartoum government would be happy just to control the oilfields and transportation for oil, which included pipelines and roads. This has two consequences. First, the Khartoum government has been content to leave the south in anarchy rather than spend enough money to "win" the war. This leaves the south in constant warfare, with violence that is both bad in itself and prevents economic development, a result possibly worse than a northern victory. Second, since the Khartoum government does want to protect the oil, it has been ruthless in doing so. People living near the oil have been forced to leave, and the government has kept up the war so as to protect the oilfields.

The main-- perhaps the only-- beneficiaries of the suffering are the foreign oil companies. They get to drill the oil and take a share of the profits. The division of labor in the oil-company-government partnership is that the oil company extracts the oil and the government prevents opposition to the extraction, splitting the profits. Other entities also benefit: e.g., Goldman Sachs provides financing and the government of Canada gets taxes from Canadian oil companies. All these parties bear moral blame. In fact, it could well be that they benefit more than the government of Sudan, which must spend much or all of its share of the profits on the army-- a production expense.

SSFI takes no position on who in Sudan deserves the profits from oil drilling. We only note that the current situation is good for neither the north nor the south. If even 5 percent were given to southern Sudan, it would be better off than it is now, with 0 percent and anarchy. If even 5 percent were given to northern Sudan, it would be better off than now, with 100 percent, but heavy military spending. Who deserves the oil profit is a difficult philosophical question that we will not address here except to note that natural resources are a gift of God, equally undeserved by the people lucky enough to live where they are discovered and by the people who live 500 miles away.

Quite apart from the question of how the oil revenue should be spent, however, we can say a number of things about what foreign oil companies should do.

The Amount of Oil Money

Sudan's proven oil reserves are estimated at about 700 million barrels (REUTERS, May 10, 2000, "Sudan now self-sufficient in oil, to export petrol," Alistair Lyon, http://www.sudan.net/wwwboard/news/30832.html, May 26, 2000). At 10 dollars per barrel, the value of the oil would come to 7 billion dollars. Estimate of oil reserves range from 300 million to 3 billion barrels, however, depending on definition and opinion.

The estimated oil revenue for the Sudanese government is $1,000,000 per day, which by odd coincidence is about equal to three other key figures: the government's spending on arms, the amount Sudan used to spend on imported oil, and the amount spent on relief by Operation Lifeline Sudan, the United Nations umbrella organization.

On the first day of oil export shipments in 1999, an import shipment of 20 Polish T-55 tanks arrived in Port Sudan.

Maps

The following SSFI map shows features relevant to oil and to the civil war.

11 detailed maps covering all southern Sudan were produced by Save the Children and funded by USAID and are available at http://Www.state.gov/www/issues/relief/sudan.html. ReliefWeb has about ten maps of various kinds, including maps of agricultural regions, etc. at http://Www.reliefweb.int/mapc/afr_ne/index.html. The University of Texas as a good map collection,with U.S. government Sudan maps at http://Www.lib.utexas.edu/Libs/PCL/Map_collection/sudan.html.
The Companies Involved

Much of Sudan is being explored for oil, including the Suakin region near the Red Sea, but Upper Nile province is of most concern to us. The business organization is complicated and interlinked. There are both private and government-owned companies, and many of them have subsidiaries or joint ventures with different names. Moreover, territory is allocated by the Khartoum government in concessions to consortiums of several companies.

The main one is the Great Nile Petroleum and Oil Corporation (GNPOC) in Heglig, which is composed of the following companies.

1.

The China National Petroleum Corporation (CNPC) has a 40 % share. It is controlled by the government of Communist China, but partly owned, under the name of PetroChina, by private investors around the world. This includes a $ 576 million investment by BP Amoco.

2.

Petronas (Petroliam Nasional Berhad), owned by the Malaysian government, has 30%.

3.

Talisman Energy, a private Canadian company, has 25%.

4.

Sudapet, owned by the government of Sudan, has 5%.

The second consortium operates the Block 5A concession. It is composed of the following companies.

1.

International Petroleum Corporation (IPC), owned by Lundin Oil AB, a private Swedish company, has 40.357%.

2.

Petronas (Petroliam Nasional Berhad), owned by the Malaysian government, has 28.5%.

3.

ÖMV (Sudan) GmbH, an Austrian company, has 26.125%.

4.

Sudapet, owned by the government of Sudan, has 5%.

Other oil companies involved include

1.

Agip, an Italian company that is a subsidiary of Eni. On September 11, 1999 it reportedly sold its Sudan oil operations to a Mauritius businessman, Mr. Kotak, to be operated under the name GAPCO). Its website also reports that it sold it gas station operations in Sudan in 1999. Eni has also done extensive engineering and construction for the oilfields and pipeline.

2.

Gulf Petroleum Company, owned by Qatar Petroleum Company and two Sudanese companies, Concorp and National Petroleum Company. It owns an oil field at Adar Yale in Upper Nile. This is the older and smaller oil area in Sudan.

3.

National Iranian Gas Company (NIGC), owned by the government of Iran.

4.

TotalFina(France).

5.

Trafigura Beheer B.V. (the Netherlands) is an oil wholesaler who has signed a contract with the Sudanese government to market most of its oil (Amnesty International Report, p. 3).

Royal Dutch Shell (The Netherlands and Britain) owns a refinery in Port Sudan. The newest refinery is at El-Geili, 44 miles north of Khartoum. El-Obeid has a smaller and older refinery.

An oil field exists at Suakin, in Sudan but on the Red Sea rather than near the Coast. Amni International Petroleum, of Nigeria, is one company operating there. Arakis, which Talisman bought into, is another.

In March, 2000, the Khartoum government signed a new oil exploration agreement for the Upper Nile area around Melut near the Ethiopian border with a consortium of Gulf Oil Company (Qatar) and al-Ghanawa (Sudan) with a 46% stake, three unnamed Canadian and European companies with 46%, and Sudapet with 8%. Melut Petroleum is the name of the joint venture.

Fosters Resources was one of the Canadian companies. In May, 2000, however, it backed out. A May 16 article says, "The company said 'a retraction from interested parties,' influenced by certain media coverage that painted its project as 'a plot to fuel a civil war,' caused it to default on its production sharing deal with the Sudanese government. Its first payment was due yesterday." ("Fosters bows out of Sudanese mine: Human rights campaign blamed for banking loss," National Post, May 16, 2000 p. C1, Claudia Cattaneo.)

Work on a pipeline some thousand miles long to take out the oil began in 1997 and was finished in 1999. Building and maintenance includes Denim Pipeline Construction Ltd (Canada), Roll’n Oil Field Industries (Canada), Mannesmann (Germany), the Europipe consortium, Weir Pumps Ltd (United Kingdom), Techint (Argentina), Allen Power Engineering Ltd (United Kingdom), and, most importantly, the Chinese government.

There has been heavy military involvement with the pipeline and oilfields. The Sudanese army has of course been involved, but there are also plausible reports of Chinese army soldiers, and mercenaries from Malaysia and Branch Heritage, an offshoot of the celebrated Executive Outcomes. Local warlords are no doubt also being employed. Such facts as who is hiring what soldiers and which soldiers are depopulating the villages and which merely defending oil facilities are hazy, and the oil companies do not grant the access needed by independent reporters to find out how deeply they might be implicated in the atrocities.

In Nairobi, Kenya on 23 October,1999, U.S. Secretary of State Madeleine Albright said, "We have our sanctions, but other countries are engaged in what they're calling a critical dialogue and are looking at ways to help them expand their oil drilling. We're going to have to talk to some of our allies about ways to put pressure on Khartoum." (http://www.security-policy.org/papers/1999/99-C132.html)

"Doing business with GNPOC or Sudapet, like doing business with the Government of Sudan, carries criminal penalties of up to $500,000 per violation for corporations and up to $250,000 for individuals, as well as imprisonment of up to 10 years. Civil penalties of up to $11,000 per violation may be imposed administratively by Treasury's Office of Foreign Assets Control (OFAC)." However, the U.S. Treasury immediately gave special exemptions to China National Petroleum Corporation, Petronas, and Talisman, which are 95% of GNPOC. (Casey Institute, " 'Classic Clinton': Like Canada, U.S. refuses to Sanction Sudan's Foreign Oil Partners -- But Pretends to Do So," Publications of the Center for Security Policy No. 00-F 10, 16 February 2000, http://www.security-policy.org/papers/2000/00-F10.html.)

Bad Things That Are Happening

Since this area is important to the Khartoum government, though, outsiders are not allowed access, and it is hard to verify reports of atrocities. Rumors swirl of Chinese forced labor and Arab slave trading, rumors that the government and the oil companies have not been willing to disprove by allowing reporters access. What seems clear is that the oil areas have been violently cleansed of southerners, that the drilling has provided no spillover benefits to local people, and that oil company facilities are routinely used for terror raids against civilians.

The best source of information is the Harker Report, commissioned by the Canadian government and released in early 2000. Its concern is with the involvement of Talisman, a Canadian company, not with oil drilling generally. The excerpts below from the long (100+ pages) report will give you an impression of what is happening. Note that other companies, such as Swedish Lundin, Malaysian Petronas, and the Chinese state oil company, have not been even as open as Talisman, and presumably have even more to hide.

Some excerpts from the Harker Report:

*

"The major displacements, or what some have referred to as forced removals, for one part of Unity State, the Pariang area, coincided with the outbreak of factional fighting around the state capital, Bentiu, in May, 1999. Ruweng County/ Pariang Province UN Special Rapporteur Leonardo Franco wrote of this area being assaulted in May 1999, with villages on the eastern edge of Heglig being attacked and burnt to the ground. He said that as many as six thousand homes were destroyed, along with 17 churches, all leaving 1,000- 2,000 people displaced."

*

"The claim has been made by Talisman Energy Inc. that the"oil field area" has never known permanent habitation,always being the scene of widespread flooding in the rainy season, and of cattle drives and nomad camps in the dry season. But Heglig used to be known by its Dinka name,Aling, and may,before oil exploration in the 1980's, have been home to permanent settlement by the Dinka Panaru. The area to the east of Heglig, towards Pariang village and beyond there into the depths of Ruweng county, certainly was. Maps made in 1954, prior to Sudanese independence, show that Ruweng County and the area westwards to Heglig and south towards Rubkona and the Bahr El Ghazal River was home to the Dinka Panaru and Dinka Alor, cattle-rearing people."

*

In November 92, and until April 93, the GOS and Arab murahleen allied to it conducted a 5 month offensive with looting, burning, abduction. In all, 57 hamlets were burned. In all, 57 hamlets were burned. A new offensive began in December 1993, when 26 people were killed in hamlets near to Heglig 11 (Panlok, Kwok, Nhorial, Panagwit); it was after this that the area around Heglig was more or less deserted except for GOS forces."

*

"December 97 into 1998 saw the burning of tukuls in Panlok-Kwok,Mankuo,Aloual,& Ngoniak."

*

"It is difficult to avoid Leonardo Franco's conclusion that a "swath of scorched earth/cleared territory" is being created around the oilfields."

*

"Certainly, there seem to be few, if any, Nuer or Dinka at work at Heglig, which seems to fit with a widely held view in Western Upper Nile that the GOS, thus GNPOC, views all non-Arabs as potential threats to security. Skilled workers are brought from the North; the unskilled are recruited, on an as needed basis, by the Arab overseers working for GNPOC, and they go to the Heglig Market for this purpose, a market where are gathered the Jallaba traders and the Bagarra nomads who have proliferated in the area since the time of Chevron."

*

"We also learned, and have reported, that flights clearly linked to the oil war have been a regular feature of life at the Heglig airstrip, which is adjacent to the oil workers' compound. It is operated by the consortium, and Canadian chartered helicopters and fixed wing aircraft which use the strip have shared the facilities with helicopter gunships and Antonov bombers of the GOS. These have armed and re-fuelled at Heglig and from there attacked civilians. The matter of the military use has been discussed at a high level with Talisman, which assured us that it happened in November, and that when it came to the attention of Talisman executives, a verbal protest was lodged with the Sudanese authorities. The offending machines were removed, but they came back. A second protest was lodged, and they were removed again. We are troubled, however, by other credible reports, that the military use of Heglig airstrip has been more or less constant since May 1999, interrupted not by protest but by such events as the appearance in the area of the team of financial analysts taken to Heglig by Talisman, or even our own arrival there in early December, 1999. One report we have received has it that during our own visit, the military aviation was relocated to Muglad, a town north west of Heglig."

*

[Of the hospital, including a fancy childbirth ward, that Talisman claimed it built for the local people] "But when we were there, we saw almost as many incubators as patients. Talisman explained to us that our visit took place at 4pm during Ramadan, when the outpatients had gone home. However, when we flew out of Heglig, and passed over the hospital at about 7 am., we counted only two people in the forecourt. There is a suspicion that only Arab patients are welcomed at the hospital, that Dinka and Nuer are kept out of Heglig as far as possible. This is not allayed by word from Talisman that a misunderstanding had led to the patients being moved out when we visited."

*

"We have reported a situation where the GOS forces use airstrip facilities built by oil, for oil, facilities denied to the NGOs. These should be allowed to use the airstrips at Bentiu and Rubkona, where IPC/ Lundin, the other oil company, is establishing its base camp. Also the ICRC, which helps all sides in the conflict, is being seriously impeded. Early in 1999, it lost one of its teams. It is rightly unwilling to risk its personnel unless they can use reliable communications systems, as they do elsewhere. Talisman enjoys the use of communications systems, and it should use its influence with the GOS to see that the ICRC can do the same."

What the Oil Companies Should Do

1.

One good option, which Chevron and other companies have taken (most recently Fosters Resources in May 2000), is simply not to be in the oil business in Sudan while the current oppression continues. This is not the only option, but it is the simplest, and raises the least temptation to sacrifice principle for greed.

2.

Oil companies should help the people of southern Sudan, in verifiable ways, out of their own budgets. This help should not be simple food aid, but investments in the future-- farming equipment and infrastructure. Special help should be given to anyone displaced by the Khartoum government's ethnic relocations done to protect the oilfields.

Oil companies should have publicly monitored discussions with the government about human rights abuses. Public monitoring is crucial, because otherwise it is unlikely such discussions will really occur.

3.

Oil companies should insist that the government of Sudan allow them to invite independent investigators be allowed to travel in the oil areas in which they operate with cameras and tape recorders and let the world know what is going on there. If there is no oppression in a company's concession, the company has nothing to fear from this.

4.

Oil companies should reveal, in a way that can be independently verified, what fraction of the oil revenue is going to expenditures that benefit local people. If that fraction is 0 or 1 percent, the world should know, as a basis for discussion of whether such a fraction is just.

5.

Oil companies should allow independent observers such as newspaper reporters free access to any facilities they pay for-- road, airfields, and so forth-- to monitor whether they are being used for military purposes by the government of Sudan or by quasi-governmental military units.

6.

People who benefit from the oil operations in southern Sudan have a moral responsibility for what happens there. If you benefit from advantageous terms because other companies are too conscientious to be there, or if your income would fall if the government of Sudan did not engage in oppression, then you should be troubled.

This goes well beyond simply doing business with an oppressive government. We are talking about earning extra income because the government is oppressive, perhaps benefiting even more from the oppression than the government does itself. You need not be a hired mercenary or an oil company executive to be in this category, though we appeal to those people too. You might just be a shareholder in Talisman or one of the companies that has a contract for oil drilling supplies. If you are, please ponder what we have said.

7.

We make no comment on how the oil revenue should be distributed between North and South, which is a political rather than a humanitarian question.

Oil companies may also wish to take note of the legal ramifications of atrocities in Nazi Germany that are still arising in 2000, some fifty years later. Particularly if the government of Sudan changes in the next 50 years, it might well happen that companies now operating in southern Sudan may acquire legal liability, even if the companies themselves are unaware of atrocities in which they are peripherally involved. This is especially true if the companies receive any benefit from the atrocities, even indirectly, although liability might well be limited to restitution. The legal risk is highly uncertain, partly because it depends on political changes over the next half-century in Sudan and other countries where an oil company operates.

References

Casey Institute, "Washington Post, Madeleine Albright See the Light: Campaign to Block Sudan-Chinese Oil Entente Gains Ground," Publications of the Casey Institute of the Center for Security Policy No. 99-C 132,15 November 1999, http://Www.security-policy.org/papers/1999/99-C132.html.

"Exploiting Sudan's Agony," The Washington Post, November 15, 1999, http://Www.vitrade.com/editorials/991115_wp_editorial.htm.

TotalFina proves it won't shy away from controversy. Tackles world hot spots: It's the largest oil and gas producer in Africa and owns a concession in Sudan," Claudia Cattaneo, National Post, Friday, November 26, 1999, http://Www.vitrade.com/talisman/991126_totalfina_proves_it_won.htm.

"B.C.'s Lundin family doesn't let politics get in the way International empire," Ian McKinnon, National Post, Friday, November 26, 1999, http://Www.vitrade.com/talisman/991126_lundin_oil_family_politics.htm.

"Influential Desmarais family has ties to Sudan TotalFina's oil interest," Paul Waldie, Claudia Cattaneo and Kathryn Leger, National Post, Friday, November 26, 1999, http://Www.vitrade.com/talisman/991126_influential_desmarais_family_ties_Sudan.htm.

"Meeting the victims of Sudan's oil boom Death and displacement: Canadian company claims ignorance of atrocities," Charlie Gillis, National Post, Saturday, November 27, 1999, http://Www.vitrade.com/talisman/991127_meeting_the_victims_of_sudan.htm.

Verney, Peter, "Oil and Conflict in Sudan: Raising the Stakes," Hebden Bridge: Sudan Update, 1999 ,60 pp., ISBN 0 9537678 0 9, (order address: sudanupdate@gn.apc.org). This pamphlet is an excellent survey, with good maps.

"Human Security in Sudan: The Report of a Canadian Assessment Mission Prepared for the Minister of Foreign Affairs Ottawa," January 2000 [the Harker Report], http://Www.dfait-maeci.gc.ca/foreignp/menu-e.asp.

Casey Institute, " 'Classic Clinton': Like Canada, U.S. refuses to Sanction Sudan's Foreign Oil Partners -- But Pretends to Do So," Publications of the Center for Security Policy No. 00-F 10, 16 February 2000, http://Www.security-policy.org/papers/2000/00-F10.html.

"Canada to lay down law to Fosters over Sudan deal, "Reuters, March 13, 2000, 18:07:02 EST (-5 GMT).

"No Blood for Oil! Western Firms and Genocide in Southern Sudan - A Human Rights Report by Society for Threatened Peoples," Report No. 25 / April 2000, http://Www.gfbv.de/gfbv_e/docus/report/sudan_e.htm.

Amnesty International - Report - AFR 54/01/00, May 2000, "Sudan: The Human Price Of Oil," http://Www.amnesty.org/ailib/aipub/2000/AFR/15400100.htm.

"Sudan now self-sufficient in oil, to export petrol," REUTERS, May 10, 2000, Alistair Lyon, http://Www.sudan.net/wwwboard/news/30832.html, (May 26, 2000)

"Fosters bows out of Sudanese mine: Human rights campaign blamed for banking loss," National Post, May 16, 2000 p. C1, Claudia Cattaneo.

"Drilling for a corporate conscience Talks have broken off between Talisman Energy and four NGOs. Activist Ernie Regehr explains why," The Globe, ( Members.tripod.com/SudanInfonet/regehr.txt, May 26, 2000)

Vitrade, "Follow the Money; Who is Financing the War in Sudan?" http://Www.vitrade.com/ (May 26, 2000).

Vitrade, "In Sudan, it is difficult to tell the players without a scorecard. Here is your scorecard," http://Www.vitrade.com/who_is_who/whoiswho.htm (May 26, 2000).

Mbendi Information for Africa, "Oil Industry Profile Sudan," Mbendi.co.za/cysuoi.htm (June 14, 2000).

Horn of Africa
The following provides a brief overview of the energy sectors of the Horn of Africa region -- Djibouti, Eritrea, Ethiopia and Somalia.

Note: Information contained in this report is the best available as of August 2003 and is subject to change.

Djibouti map. Having problems, call our National Energy Information Center on 202-586-8800 for help.DJIBOUTI
The French Territory of the Afars and the Issas became Djibouti in 1977. In November 1991, the mainly Afar-supported Front for the Restoration of Unity and Democracy (FRUD) began fighting the Issa-dominated government. Sporadic attacks continued in 1997 and 2000. On May 12, 2001, President Ismail Omar Guelleh presided over the signing of the final peace accord officially ending the decade-long civil war. France maintains one of its largest military bases outside France in Djibouti with some 2,800 troops as well as warships, aircraft and armored vehicles. In addition to French troops, Djibouti has become a launching point for the US war on terrorism in the Middle East. United States troops have been stationed and passing through the country since late-2002. In exchange for use of territory, the United States has offered monetary assistance to help Djibouti improve its counterterrorism operations.

Djibouti's main economic asset is its strategic location. The city of Djibouti, capital and home to nearly two-thirds of the country's population, is a major transshipment port and bunkering facility. Good transportation infrastructure with the country and links to neighboring African states earns Djibouti much-needed transit taxes and harbor fees. Trade through Djibouti increased significantly during the Ethiopian-Eritrean war when Djibouti became the only significant port for landlocked Ethiopia.

Djibouti is working to significantly expand the capacity of its ports by building a new oil jetty to accommodate oil products, LPG, edible oils, and bitumen on vessels up to 120,000 deadweight tons (DWT) and have the capacity to handle 100,000 cubic meters of petroleum products. This first phase of port expansion will begin in September 2003, with operations beginning a year later. The second phase of the project adds a $300 million, 2,000 meter long, mega container port. The new additions to Djibouti's ports, supported by Emirates National Oil and Dubai Ports International, will enable the port of Djibouti to meet growing cargo requirements over the next 20 years.

Djibouti's real gross domestic product (GDP) is expected to grow 2.8% in 2003, following estimated growth of 2.4% in 2002, and 1.9% in 2001. Strong growth has been fueled by the transportation and communication sectors as well as the trade and tourism sectors, which together make up more than 40% of GDP. An unemployment rate of 40% to 50% continues to be a major problem for Djibouti's economy. In December 2002, the International Monetary Fund (IMF) approved the third disbursement of funds ($6 million) from a Poverty Reduction and Growth Facility (PRGF) signed with Djibouti in 1999.

OIL
Although there is currently no upstream (exploration or production) oil activity in Djibouti, the government has tried to generate interest in offshore oil exploration without success. The downstream oil sector, however, is an important aspect of Djibouti's economy, given the role the capital city plays as a significant regional bunkering and refueling facility. Three companies--ExxonMobil, Shell and Total-- handle refueling at Djibouti's port. The companies, along with ChevronTexaco, also distribute and market petroleum products in the country. Storage capacity at the port facility is 1.26 million barrels (200,000 cubic meters). The Dubai Ports Authority (DPA) was awarded a 20-year contract in June 2000 to manage the port. DPA hopes to increase Djibouti's handling capacity from 125,000 metric tons to 300,000 metric tons per year and to make it the leading transshipment point on the African continent.

ELECTRICITY
Djibouti currently has installed electricity generating capacity of 85 megawatts (MW), all of which is thermal (oil-fired). In January 2001, U.S.-based Geothermal Development Associates (GDA) announced that it had completed a feasibility study on the development of a 30-MW geothermal power plant in Djibouti. The study, which commenced in August 2000, established the commercial viability of the proposed generating facility. The $115 million plant, to be located in the Lake Assal region west of the capital, will be constructed on the build own operate (BOO) financing scheme. The Global Environmental Facility (GEF), a joint initiative of the World Bank and the United Nations (UN), has approved a $280,000 financing package to pay for contract negotiations required for the project. To date, however, these funds have not been released. At the same time, however, Electricite de Djibouti, the national electric company, has begin to remove aging diesel-fired generating units. To continue to provide power to rural residents, the government, with the help of a grant from a number of Arab financial institutions, is installing solar and wind capacity. The primary goal of the project is to replace old diesel powered rural water pumps with new ones powered by renewable resources, but excess energy will be used for electrification.

ERITREA
Eritrea map. Having problems, call our National Energy Information Center on 202-586-8800 for help. In 1952, a UN resolution federating the former Italian colony of Eritrea with Ethiopia went into effect. In 1962, Emperor Haile Selassie unilaterally dissolved the Eritrean parliament and annexed the country. The Eritrean fight for independence continued even after Haile Selassie was ousted in a coup in 1974. A 30-year struggle for independence ended in 1991, with Eritrean rebels defeating the governmental forces led by Mengistu Haile Miriam. On April 23-25, 1993, Eritreans voted overwhelmingly for independence from Ethiopia in a UN-monitored free and fair referendum. The Eritrean authorities declared Eritrea an independent state on April 27, 1993. The National Assembly was elected in national, freely contested election and then chose former liberation movement leader Isaias Afwerki as President.

When Eritrea and Ethiopia separated amicably in 1993, several border issues remained unresolved. Fighting broke out between the two countries in May 1998 and continued until June 2000 when both sides accepted an Organization of African Unity (OAU) peace proposal. The formal treaty ending the war was signed on December 12, 2000 and an independent entity, the Eritrea Ethiopia Boundary Commission (EEBC) was established to determine the new border. The EEBC released its report on April 13, 2002, but Ethiopia is contesting some of the commission's decisions.

Growth of the Eritrean economy was hampered by the war. Eritrea's real GDP growth in the two years prior to the conflict averaged 7.4%. Real GDP growth fell to 4.0% in 1998, 0.8% in 1999 and -8.2% in 2000. With the cessation of hostilities, real GDP growth of 9.7% was observed in 2001, and growth of 8.8% in 2002. Continued growth of 7.1% is expected in 2003. Inflation is an ongoing problem, it was 24% in 2002, but it is expected to decline to less than 15% in 2003. Multilateral and bilateral donors have pledged nearly $132 million towards the demobilization of 200,000 Eritrean soldiers and the social and economic recovery of the country. Donor development funding is seen as crucial in the improvement of the country's economy.

OIL
Hydrocarbon exploration, primarily offshore in the Red Sea, began in the 1960's when Eritrea was still federated with Ethiopia. In 1995, Eritrea signed a production sharing contract (PSC) with U.S.-based Anadarko Petroleum (Anadarko) for the offshore Zula Block. Anadarko signed a second PSC for the offshore Edd Block, located south of the Zula Block, in September 1997. Anadarko announced, in December 1997, that it had reached an agreement with ENI/Agip (Agip) to swap interests in exploration acreage. Anadarko received a 25% interest in a Tunisian block operated by Agip, and Agip received a 30% share in the 6.7-million acre Zula Block and 30% interest in the Edd Block. Burlington Resources, a U.S.-based independent, later joined the consortium by acquiring a 20% interest in both acreages. Anadarko's first two exploration wells, both drilled on the Zula Block, were unsuccessful. In January 1999, a third dry well, Edd-1 on the Edd Block, was drilled. Citing the disappointing exploration results, Anadarko and its partners ceased exploration activities and relinquished their rights to the offshore blocks.

A more recent attempt also did not meet with success. In May 2001, U.S.-firm CMS Energy signed an exploration agreement for a 14,000-square kilometer block in northeastern Eritrea but the company has released its claim as it put its entire oil exploration and production unit up for sale in May 2002.

Bab el-Mandeb (Mandab)
The Bab el-Mandeb is a narrow waterway situated between Eritrea, Djibouti and Yemen that connects the Red Sea with the Gulf of Aden and the Arabian Sea. In 2000, it was estimated that around 3.2-3.3 million barrels per day (bbl/d) of oil flowed through the Bab el-Mandeb. Disruptions or closure of the Bab el-Mandeb could keep tankers from the Persian Gulf from reaching the Suez Canal/Sumed Pipeline complex, diverting them around the southern tip of Africa (the Cape of Good Hope). This would add greatly to transit time and cost, and effectively tie up spare tanker capacity. The Bab el-Mandeb could be bypassed (for northbound oil traffic) by utilizing the East-West oil pipeline, which traverses Saudi Arabia and has a capacity of about 4.8 million bbl/d. However, southbound oil traffic would still be blocked. In addition, closure of the Bab el-Mandeb would effectively block non-oil shipping from using the Suez Canal, except for limited trade within the Red Sea region.

In December 1995 and again in August 1996, Eritrean and Yemeni forces clashed over control of the Hanish Islands, located just north of the Bab el-Mandeb. In October 1996, the two countries signed an agreement over the islands. The two sides agreed to put their case before an international court of arbitration (Permanent Court of Arbitration-PCA). The court will then issue two rulings; one on who has sovereignty over the disputed area, and one on the demarcation of the two sides' maritime boundary. In October 1998, the PCA ruled that the Hanish Islands are subject to the territorial sovereignty of Yemen. In December of 1999, the PCA issued its ruling on the maritime boundary.

Downstream and Refining
Eritrea has crude refining capacity of 18,000 bbl/d, but the refinery located in the Red Sea port of Assab has been shut down since 1997 due to the high operating and maintenance costs. Ethiopia and Eritrea, joint operators of the facility, decided to close the Assab refinery in August 1997 and import refined petroleum products to meet domestic needs.

Eritrea's petroleum consumption was estimated at 6,000 bbl/d in 2001. Marketing and distribution of petroleum products is performed by ExxonMobil, Shell and Total. In June 2000, Shell purchased the downstream operations of Agip in several African countries including Eritrea and Ethiopia. The Eritrean assets included service stations, two petroleum product depots and an LPG (liquefied petroleum gas) filling station.

In August 2000, Sudan's National Petroleum Company announced plans to lay pipelines to supply Eritrea and Ethiopia with petroleum products from its Khartoum refinery. Eritrea has not yet benefited from Sudanese oil and relations between the two countries soured in April 2003 when Sudan accused Eritrea of supporting Sudanese rebels in the eastern part of Sudan. Although Eritrea denies the charges, future trade relationships are unlikely under the current climate.

ELECTRICITY
Eritrea has approximately 60 MW of diesel-fired generating capacity. The Eritrean Electricity Authority (EEA) handles generation, transmission and distribution of electricity. In 1997, South Korean firms Daewoo and Hanjung signed an agreement to build a heavy oil-fired plant in at Hirgigo, just outside of Massawa. The plant, nearly completed, was damaged in a bombing raid by Ethiopia in 2000. In 2001, Eritrea signed loan agreements with the United Arab Emirates and Saudi Arabia for the facility's repair. The 88 MW facility came online in March 2003, but many industry experts fear that the new capacity could overload Eritrea's dated grid system. Both the European Development Fund and the World Bank have considered projects to update the transmission lines, but firm contracts have not been negotiated.

Electricity is only available in Eritrea's larger cities and towns, leaving about 80% of the Eritrean population without access to electricity. Some smaller villages have community diesel generators which can provide small amounts of electricity to households. Photovoltaic (PV) electricity generation is being used in special applications throughout the country. Twenty-six rural health centers are each supplied with 2-kilowatt (kW) solar photovoltaic power systems for refrigeration, lighting, operating theaters, fans, and laboratory equipment. Additionally, the majority of the 140 rural clinics are equipped with solar powered vaccine refrigerators. Approximately 3% (about 60 villages) of Eritrea's villages have been supplied with PV systems (0.8 to 1.2kW) to power water pumps to supply drinking water. Each system serves a minimum of 300 households. Over 70 rural schools (out of 700) have been provided with PV systems for lighting and power.

ETHIOPIA
Ethiopia map. Having problems, call our National Energy Information Center on 202-586-8800 for help. Ethiopia is the oldest independent country in Africa. Unique among African countries, Ethiopia maintained its freedom from colonial rule, except during the Italian occupation of 1936-41. In 1974, a military junta, the Derg, deposed Emperor Haile Selassie, who had ruled since 1930, and established a socialist state. The Derg was toppled by a coalition of rebel forces, the Ethiopian People's Revolutionary Democratic Front (EPRDF), in 1991. A constitution was adopted in 1994 and Ethiopia's first multiparty elections were held in 1995. A two-year border war with Eritrea ended when a peace treaty was signed in December 2000. Disagreement on the location of the border between the two countries is ongoing, despite the final ruling of a commission charged with identifying the border.

Ethiopia's economy is primarily agrarian, with the agricultural sector accounting for 45% of GDP and 80% of the workforce. Coffee, Ethiopia's primary export crop, accounted for 58% of total exports in 1999, and has averaged two-thirds of all export earnings over the last 20 years. Other important agricultural exports include qat (khat), a mild stimulant from the leaves of the Catha Edulis shrub, pulses, oilseeds, live animals and hides. Ethiopia's real GDP growth was 5.4% in 2000 and increased to 7.7% in 2001. Growth in 2002 slowed to 4.3% as a severe drought decimated agricultural production. Growth forecasts for 2003 suggest that the economy will expand by 4.0%

Although continued donor support is seen as the crucial element in Ethiopia's economic reform, both the IMF and World Bank suspended new lending to Ethiopia during the border war with Eritrea. The suspension was lifted after the signing of the peace accord in December 2000. The World Bank approved a $400 million loan to finance emergency recovery, military demobilization and reintegration projects. In July 2001, the IMF approved a $112 million PGRF to support Ethiopia's economic program. In November 2001, the IMF and World Bank announced that Ethiopia was eligible for a $1.9 billion debt relief package under the Heavily Indebted Poor Countries (HIPC) Initiative, becoming the 24th country to qualify for debt relief under the HIPC's enhanced framework. The savings in debt service resulting from the HIPC are substantial, amounting to about $96 million per year on average until 2021. The resources made available by debt relief provided under the HIPC will be allocated to key anti-poverty programs. Poverty-targeted expenditures are projected to increase steadily, from 10.9% of GDP in 2001, to 14.7% in 2002, and 15.5% in 2003.

OIL AND NATURAL GAS
Ethiopia's current proven hydrocarbon reserves are minimal, but the potential to increase reserves to commercial viability is seen as promising. The country's geology is similar to that of its oil-producing neighbors to the east (on the Arabian peninsula) and the west (Sudan). In April 2001, the Ministry of Mines and Energy reported that hydrocarbon seeps had been discovered in several regions. The government plans to conduct feasibility studies to establish the extent and viability of the deposits.

Hydrocarbon exploration in Ethiopia's Ogaden Basin began over 80 years ago (Standard Oil in 1920). The Ethiopian government formed the Calub Gas Share Company (CGSC) to develop the fields. In 1994, the World Bank approved a $74 million loan to develop the Ogaden Basin fields. The Ethiopian Privatization Agency (EPA) put the CGSC up for privatization in 1998, but the EPA, citing weak bids, withdrew the tender. In December 1999, Houston-based Sicor announced that it had signed a $1.4 billion joint-venture deal to develop the Calub natural gas project. Under the terms of the agreement, Gasoil Ethiopia Project (GEP), the joint-venture firm, will acquire 95% of the CGSC under the Ethiopian government's privatization law. Currently, 5% of the CGSC is held by local private investors. The Ethiopian government will hold a 20% interest in GEP with Sicor holding the remaining share. GEP plans to construct a 375-mile, 24-inch pipeline to transmit natural gas to the town of Awash, which is approximately 75 miles east of the capital Addis Ababa. At Awash, plans call for construction of a cryogenic liquids plant and two gas-to-liquids process systems with capacity to process 200 million cubic feet per day (Mmcf/d) of natural gas. The end products will be synthetic fuels and petrochemical feedstocks plus steam that will generate electricity and help produce 20,000 bbl/d of potable water. A planned refinery will produce products including diesel, gasoline, kerosene and jet fuels. The gas-to-liquids system will also produce some 500 tons of ammonia per day as feedstock for a urea plant to be constructed. Although construction on the pipeline was scheduled to begin in the summer of 2002, gas development in Ogaden has not yet begun.

In June 2003, the Ethiopian government signed an oil exploration deal with Petronas for 5,800 square mile tract in Gambela, in the far western part of the country. The region is closely related the Sudan oil fields. Petronas has committed to investing in regional infrastructure, employing local staff, improving health services, and developing the skills of the ministry of Mines. Petronas is also interested in natural gas exploration in Ogaden, but no official plans have yet been made.

Downstream
Ethiopia's petroleum consumption was estimated at 23,000 bbl/d in 2001. With the closure of the Assab refinery in 1997, Ethiopia is totally reliant on imports to meet its petroleum requirements. Some petroleum imports are received at the port of Djibouti, and shipped via rail and tanker truck to Ethiopia. With the recent development of oil in Sudan, however, Ethiopia has begun importing oil which, under COMESA, is not subject to tariffs. Oil imports from Sudan began in January 2003 transported by tanker trucks along a new road between the two countries. Since the trade began, however, oil shipments, which are expected to meet 85% of Ethiopia's gasoline requirements, have halted twice. Nevertheless, the two countries have agreed to upgrade the road along this important transit corridor to increase commerce.

Marketing and distribution of petroleum products is performed by ExxonMobil, Shell and Total. In June 2000, Shell purchased the downstream operations of Agip in several African countries including Ethiopia. The Ethiopian assets included over 100 service stations, two depots and four LPG filling plants.

ELECTRICITY
Ethiopia has approximately 529 MW of installed generating capacity. The vast majority of Ethiopia's existing capacity (85%) is hydroelectric. The Ethiopian Electric Power Corporation (EEPCO), the state-owned firm responsible for electricity generation, plans to construct several new generating facilities to provide electricity to Ethiopia. Currently, less than half of Ethiopia's towns have access to electricity though EEPCO electrified more than eighty towns between 2001 and 2003. Since most of Ethiopia's electricity is generated from hydroelectric dams, the country's power system is vulnerable to extended droughts. Ethiopia recently endured more than six months of power cuts due to low water levels in dams around the country. Initially blackouts were scheduled once a week, but as the drought wore on, customers lost power for 15 hours two days a week, a situation that strained the resources of many businesses in urban centers.

EEPCO is rapidly expanding their generating capacity. The 73-MW Tis Abay 2 facility, located on the Blue Nile (Abay) came online in 2001. U.S.-based Harza Engineering (now MWH Global) is overseeing the construction of an additional 34-MW unit at the Finchaa hydroelectric facility in western Ethiopia. EEPCO also plans to open the new 180-MW Gilgel Gibe hydroelectric facility in October 2003. Gilgel Gibe, located on the Omo River in southwestern Ethiopia, will increase the country's power capacity to 700-MW. EEPCO has begun development of Ethiopia's largest generating facility at Tekeze. The 300-MW hydroelectric facility will be located in northern Ethiopia and will cost about $350 million.

Construction of Ethiopia's first Independent Power Project (IPP) was set to commence in early 2002. The Gojeb IPP will consist of a 150-MW hydroelectric facility in western Ethiopia. The project is being developed by Mohammed International Development Research Organization & Companies (Midroc). When completed, Midroc will sell the output from Gojeb to EEPCO. Agreements on additional IPP projects were signed in June 2001. The largest facility will be the 162-MW Genale hydroelectric facility located on the border between the Oromia Region and the Southern Peoples Nationalities Regional State. The plants will be built under the Build-Operate-Transfer (BOT) system. ENERCO will operate the facilities for 30 years, which would be renewable for another 30 years.

In April 2001, Ethiopia signed agreements to export electricity to neighboring Djibouti. Negotiations are ongoing and exports are expected to begin in 2004, following the interconnection of the countries' electric grids.

Somalia map. Having problems, call our National Energy Information Center on 202-586-8800 for help. SOMALIA
The Somali Republic gained independence on July 1, 1960. Somalia was formed by the union of British Somaliland and Italian Somaliland. A socialist state was established following a coup led by Major General Muhammad Siad Barre. Rebel forces ousted the Barre regime in 1991, but turmoil, factional fighting, and anarchy ensued. The Somali National Movement (SNM) gained control of the north, while in the capital of Mogadishu and most of southern Somalia the United Somali Congress achieved control.

In 1992, responding to the political chaos and humanitarian disaster in Somalia, the United States and other nations launched peacekeeping operations to create an environment in which assistance could be delivered to the Somali people. By March 1993, the potential for mass starvation in Somalia had been overcome, but the security situation remained fragile. On October 3, 1993 U.S. troops received significant causalities (19 dead over 80 others wounded) in a battle with Somali gunmen. When the United States (in 1994) and the UN withdrew (in 1995) their forces from Somalia, after suffering significant casualties, order still had not been restored.

A Transitional National Government (TNG) was created in October 2000 with the three-year mandate of creating a permanent national Somali government. Although they declared their independence, the TNG does not recognize Somaliland and Puntland as independent republics but has been unable to reunite the country. Peace talks began in late-2002 and are ongoing. Somaliland has refused to participate in these talks saying that while it would welcome peace in former Italian Somalia, Somaliland is an independent country awaiting international recognition.

Somalia's economy, one of the world's least developed, has been further hampered by the country's ongoing internal strife. Reliable economic data is scarce, and the TNG cannot manage the national economy while it struggles to gain control over the country. Livestock production (cattle, goats & sheep) is the mainstay and largest foreign exchange earner of the Somali economy. An outbreak of Rift Valley Fever (RVF) in southern Saudi Arabia and Yemen (the first reported outside Africa) in 2000 led six Gulf States - Saudi Arabia, Bahrain, Oman, Qatar, Yemen and the United Arab Emirates - to ban livestock imports from the Horn of Africa. Middle Eastern countries are considering lifting the ban on livestock in early 2004. Another significant portion of the Somali economy, foreign remittances, have fallen significantly following the US government's closure of the Al-Barakat transfer company, which has been accused of transferring funds on behalf of Osama bin Laden and the Al-Qaida terrorist network. Remittances from abroad are estimated to be $200-$500 million annually.

While the TNG is in the process of reestablishing Somalia's Central Bank. Somalia is unable to receive IMF, and other multilateral aid due to the lack of institutions/financial infrastructure in place.

OIL AND NATURAL GAS
Somalia has no proven oil reserves, and only 200 billion cubic feet of proven natural gas reserves. Somalia currently has no hydrocarbon production. Oil seeps were first identified by Italian and British geologists during the colonial era. Exploration activities were focused in northern Somalia, and several foreign firms, including Agip, Amoco, Chevron, Conoco and Phillips, held concessions in the area. The firms all declared force majeure following the collapse of the central government.

Exploration activity remains hindered by the internal security situation, and the multiple sovereignty issues. In February 2001 Total signed an exploration agreement with the TNG. The twelve-month agreement grants Total the rights to explore in the Indian Ocean off southern Somalia. Hassan Farah, TNG's Minister for Water and Mineral Resources, stated that the government would provide security during the exploration activities. Several factional leaders have denounced the agreement, and stated that the TNG did not have the authority to sanction the agreement, nor the power to guarantee the safety and security of the exploration operations.

In May 2001, Somaliland signed an agreement with U.K.-registered Rovagold and two Chinese firms, CPEC and CPC, for the right to explore for oil. Dubai-based Zarara Energy also signed an exploration agreement with Somaliland. The Somaliland government has said it will honor, until they expire, the existing contracts foreign companies signed with the Barre regime that are in their territory. None of the firms have resumed operations in Somaliland.

Somalia's petroleum consumption was an estimated 4,000 bbl/d in 2001. The organization officially responsible for all petroleum product distribution and retailing is the cooperative Iskash. The state-owned Iraqsoma Refinery Corporation operated a 10,000-bbl/d refinery outside of Mogadishu, but it has been inoperative since 1991. Total is involved in the downstream sector in Somaliland. It rehabilitated and manages the operations of the oil terminal in Berbera, Somaliland's primary port. Total also supplies fuel to airports located in Berbera and Somaliland's capital of Hargeisa.

ELECTRICITY
Somalia currently has installed electricity generating capacity of 70 megawatts (MW), all of which is diesel-fired. Ente Nazionale Energia Elettrica (ENEE) is the entity responsible for generation, transmission and distribution of electricity in Somalia. Electrical infrastructure has been damaged and destroyed, and the ongoing strife has hindered the development of new electric resources. A planned hydroelectric facility on the Juba River has been delayed due to the continued fighting. Studies have indicated that the Horn of Africa, especially Somalia, is a prime location for harnessing wind for electricity generation. Plans for wind generation have been proposed, but were derailed following the ouster of the Barre regime.

In October 2001, WorldWater Corp., a U.S.-based water management and solar engineering company, signed agreements with the TNG to become the master consultant and contractor for all water and energy programs in Somalia. Under the three-year agreement WorldWater would develop, manage and oversee contracting for the country's water resources and incorporate renewable energy projects such as solar power into Somalia's infrastructure. This includes locating and managing groundwater sources in municipal and rural areas, delivering water for drinking and for irrigation using the WorldWater's solar pumping systems and generating independent electricity with its solar power systems.

Table 1. Economic and Demographic Indicators
Country Gross Domestic Product (GDP), 2001E (Billions of US $ -- PPP) Real GDP Growth Rate, 2002 Estimate Real GDP Growth Rate, 2003 Projection Per Capita GDP, 2001E (PPP) Population
2002E
(Millions)
Djibouti $0.6 2.4% 2.8% $1,400 0.65
Eritrea $3.2 8.8% 7.1% $740 4.50
Ethiopia $46.0 4.3% 4.0% $700 67.2
Somalia $4.1 NA NA $550 7.8
Regional Total/Average $53.9 4.2% 3.9% $670 80.1

Sources: Economist Intelligence Unit; Central Intelligence Agency World Factbook 2003; International Monetary Fund. PPP=Purchasing Power Parity. NA=Not Available.

Table 2. Energy Consumption and Carbon Dioxide Emissions, 2001
Country Total Energy Consumption (Quadrillion Btu) Petro-leum Natural Gas Coal Nuclear Hydro-
electric Other Renewable Electric Net Electricity Imports Carbon Dioxide Emissions (Million metric tons of carbon)
Djibouti 0.025 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.504
Eritrea 0.012 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.242
Ethiopia 0.066 73.1% 0.0% 0.0% 0.0% 26.3% 0.0% 0.0% 0.945
Somalia 0.008 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.163
Regional Total/Average 0.111 84% 0.0% 0.0% 0.0% 15.6% 0.0% 0.0% 1.854

Source: Energy Information Administration
Note: percentages may not add up to 100% due to rounding.

Table 3. Energy Supply Indicators
Country Crude Oil Reserves, 1/1/03 (Million Barrels) Natural Gas Reserves, 1/1/03 (Billion Cubic Feet) Coal Reserves (Million Short Tons) Petroleum Production, 2001 (Thousand Barrels Per Day) Natural Gas Production, 2001 (Billion Cubic Feet) Coal Production, 2001 (Million Short Tons) Electric Generating Capacity, 2001 (Gigawatts) Crude Oil Refining Capacity, 1/1/03 (Thousand Barrels Per Day)
Djibouti 0 0 0 0 0 0 0.09 0
Eritrea 0 0 0 0 0 0 0.06 14.6
Ethiopia 0.428 880 0 0 0 0 0.53 0
Somalia 0 200 0 0 0 0 0.07 10.0
Regional Total 0.428 1,080 0 0 0 0 0.76 24.6

Source: Energy Information Administration, Oil and Gas Journal
Sources for this report include: Africa Research Bulletin, Agence France Press, AP Worldstream, BBC, Business Wire, CIA World Factbook 2003, Economist Intelligence Unit, Energy Day, Financial Times, International Monetary Fund, Middle East Economic Digest, Middle East Executive Reports, Oil and Gas Journal, Petroleum Economist, Petroleum Intelligence Weekly, PR Newswire, U.S. Energy Information Administration, U.S. Geological Survey, World Markets Online. LINKS

For more information from EIA on Djibouti, Eritrea, Ethiopia, Somalia please see:
EIA: Country Information on Djibouti
EIA: Country Information on Eritrea
EIA: Country Information on Ethiopia
EIA: Country Information on Somalia

Links to other U.S. government sites:
U.S. Agency for International Development (USAID)
USAID The Greater Horn of Africa Initiative

CIA World Factbook: Djibouti
CIA World Factbook: Eritrea
CIA World Factbook: Ethiopia
CIA World Factbook: Somalia

Library of Congress -- Ethiopia Country Study
Library of Congress -- Somalia Country Study

U.S. State Department Consular Information Sheet on Djibouti
U.S. State Department Consular Information Sheet on Eritrea
U.S. State Department Consular Information Sheet on Ethiopia
U.S. State Department Consular Information Sheet on Somalia

U.S. State Department Background Notes on Djibouti
U.S. State Department Background Notes on Eritrea
U.S. State Department Background Notes on Ethiopia
U.S. State Department Background Notes on Somalia

U.S. Embassy in Ethiopia

U.S. Geological Survey: Djibouti
U.S. Geological Survey: Eritrea
U.S. Geological Survey: Ethiopia
U.S. Geological Survey: Somalia

The following links are provided solely as a service to our customers, and therefore should not be construed as advocating or reflecting any position of the Energy Information Administration (EIA) or the United States Government. In addition, EIA does not guarantee the content or accuracy of any information presented in linked sites.

African Union
Common Market for Eastern and Southern Africa (COMESA)
Intergovernmental Authority on Development (IGAD)
Nile Basin Initiative

International Geothermal Association - Djibouti
IMF Djibouti Information
ArabNet - Djibouti
Djibouti Government (In French)
Republic of Djibouti
University of Pennsylvania Djibouti Page
Stanford University: Djibouti
Lonely Planet Guide: Djibouti
Amnesty International: Djibouti

International Geothermal Association - Eritrea
IMF Eritrea Information
U.S. AID's Eritrea Page
University of Pennsylvania: Eritrea Page
Stanford University: Eritrea
Lonely Planet Guide: Eritrea
Amnesty International: Eritrea

IEA Hydropower Information
International Geothermal Association - Ethiopia
IMF Ethiopia Information
Ethio-American Trade & Investment Council
Ethiopian Investment Authority
Ethiopian Privatization Agency
University of Pennsylvania: Ethiopia Page
Stanford University: Ethiopia
Lonely Planet Guide: Ethiopia
Ethio.Com
Amnesty International: Ethiopia

Information on Somalia from Arab.Net
University of Pennsylvania: Somalia Page
Stanford University: Somalia
Lonely Planet Guide: Somalia
Amnesty International: Somalia

Somaliland Government (not officially recognized by the U.S. Government)
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http://66.102.9.104/search?q=cache:vottjWy89bgJ:http://www.igd.org.za/pub/papers/civilwar.doc+eni+sudan+oil+italian&hl=it&client=firefox-a

February 2000







THE CIVIL WAR IN SUDAN:
The role of the oil industry





Shannon Field
Associate Researcher at the Institute for Global Dialogue




IGD OCCASIONAL PAPER NO 23





Published by:

The Institute for Global Dialogue

P O Box 32571

Braamfontein 2017 South Africa

Tel: (27) 011-339 6585

Fax: (27) 011-339 6616

Website: http://www.igd.org.za

ISBN:1-919697-45-4

©IGD

Series Editors

Garth le Pere

Solani Ngobeni

INSTITUTE FOR GLOBAL DIALOGUE

MISSION


The Institute for Global Dialogue is an independent South African non-governmental organisation that provides policy analysis on the changing global environment and its impact on South Africa for the benefit of government and civil society.

CORE PROGRAMMES


The activities of the Institute centre around four programme areas:

1.
Africa Dialogue



This programme aims to promote second-track dialogue on African countries and regions experiencing crises of governance, with a view to (i) providing concerned parties with a platform for discussion and (ii) recommending appropriate courses of action to the South African government and civil society.

2. Multilateral Analysis



This programme aims to analyse multilateral institutions as they influence global processes of change with a view to understanding their impact on South Africa and the global South.

3. Foreign Policy Analysis



This programme aims to provide policy analysis and recommendations on South Africa’s foreign relations to the South African government, parliament, and civil society.

4. Southern Africa



This programme aims to analyse and promote and understanding of factors that advance or hinder regional co-operation, sustainable development, and security in southern Africa.









CONTENTS




MAP

PREFACE 1

BACKGROUND TO THE CONFLICT IN SUDAN 2

1. The legacy of colonialism

2. Elite domination

3. From elite domination to Holy War

OIL AND THE SUDANESE ECONOMY 4

1. Sudan’s debt burden

2. Revenue needed to fund the war

3. Expected oil revenue

4. Oil reserves and production capacity

OIL EXPLORATION AND PRODUCTION 7

1. Early exploration

2. Oil discovery and its implications

3. The Canadian debut

4. US exclusion form Sudan’s oil industry

5. US policy towards Sudan

6. The formation of the Greater Nile Oil Project

TALISMAN ENERGY OF CANADA 12

1. An issue of trust

2. Advantages of Canadian involvement

3. A potentially lucrative deal

4. Shareholder concerns

THE CHINA NATIONAL PETROLEUM COMPANY 14

1. China’s need for oil

2. A mutually beneficial venture

3. Chinese trade and investment

4. A loyal ally

PETRONAS OF MALAYSIA 18

1. Economic ties

2. Alleged arms transfers

OIL-RELATED CONFLICT 19

1. Protection of the oilfields - an NIF priority

2. Forging alliances

3. Dividing the opposition

4. Divide and rule - even among allies

5. The new pipeline and the prospect of associated conflict

THE HUMANITARIAN IMPACT OF OIL-RELATED CONFLICT 24

1. Land clearances

2. Limited access for humanitarian organisations

THE PROSPECTS FOR PEACE 28

1. The peace process

2. Sudan in South African foreign policy

ANNEXES 33
BIBLIOGRAPHY 34



PREFACE


The conflict and civil war in the Sudan in its various dimensions and complexities is one of the enduring tragedies of the African continent. Since its independence from Anglo-Egyptian rule in 1956, the country has hardly experienced the necessary stability to entrench constitutional government. Other than two civilian interregnums from 1964 to 1969 and from 1986 to 1989, the country’s politics has been dominated by military intrigue and coups. Military strongmen have aggravated the main cause of a protracted civil war, namely, historic tensions which exist between the Muslim north and the racially, religiously and culturally distinct south. The problem of insurgent southern provinces fighting an internally divided war of liberation has thus led to a sequence of political impasses and failed peace initiatives.

A fundamental problem of governance in the Sudan has been the tyranny of religious intolerance. The imposition of strict Islamic law in 1983 by Sudan’s first coup-maker, Gen. Gaafar Nimeri, provoked the ire and contempt of the largely Christian and animist south, lending new impetus to rebellion and insurrection against the rule of the north which had first broken out at independence. Despite a nominal agreement in 1972 to grant a measure of regional autonomy to the three southern provinces of Bahr al-Ghazal, Equatoria and Upper Nile, the deadweight of oppressive northern hegemony fuelled the emergence in 1984 of organised resistance in the south in the form of the Sudan People’s Liberation Movement. Its military wing, the Sudan People’s Liberation Army was soon able to establish substantial territorial gains over large parts of Bahr al-Ghazal and Upper Nile, setting the stage for the unfolding human tragedy which has so scarred Sudan’s national life. Matters hardly improved under the second military government of Lt-Gen. Omar al-Bashir who came to power in a bloodless coup in mid-1989. Notwithstanding his declared intention to make the resolution of the conflict with the south the primary aim of his Revolutionary Command Council, Al-Bashir’s authoritarian impulses saw the abolition of the Constitution, the National Assembly, political parties and trade unions.

The new Khartoum government, despite repeated attempts at introducing political reforms, solidified its grip on power by pursuing an Islamist agenda with greater vigour than its military predecessor. This only served to deepen the alienation of the fractious south and escalate an already ruinous war. Adding to the conflict’s seeming intractability is that ongoing internally-led and regionally-brokered peace initiatives failed to produce any meaningful results. This paper by Shannon Field, which has its origins as a field report to Medicins Sans Frontiers, is a depressing but necessary exposition of the complexities which drive the conflict. But it introduces a new variable and focuses attention on the crippling effect which the discovery of and lucrative returns on large oil reserves have on the conflict. The paper meticulously analyses the role of foreign oil companies and national government oil consortiums as directly and indirectly implicated in fomenting an international humanitarian disaster with few recent parallels. It is perhaps symptomatic of how strategic natural resources can determine alliances and shape allegiances in countries at war. Oil and diamonds in Angola and the abundant mineral wealth of the Congo are other examples of the same phenomenon. The IGD publishes this gripping account of a story not well understood nor widely publicised in the hope that it will spur debate and action among concerned governments, international agencies and non-governmental organisations. But we hope especially that South Africans of all persuasions and stations will make the Sudan part of their universe of concerns.

Garth le Pere: Executive Director-IGD



INTRODUCTION

Sudan, the largest country in Africa, has endured the longest civil war on the continent after forty years of intermittent fighting. The Sudanese people have witnessed transitions including three parliamentary democracies and three periods of military rule.1 Two million people have died in the past 16 years of civil war, and twice as many have been displaced, making this one of the greatest humanitarian disasters, and one of the least reported. The war has claimed more lives than the wars in Bosnia, Kosovo, Chechnya and Somalia combined.2 The specific focus of this report is on the impact of the oil industry on the civil war in Sudan. This report follows the inauguration of Sudan’s 1600 km oil pipeline, the longest in Africa, which has rejuvenated oil operations and heightened expectations of oil revenues flowing to the government of Sudan.

To put the current war in context, this report will begin by providing a background to the conflict. The importance of oil within the context of the Sudanese economy will be addressed, and the impact of ongoing oil exploration and production will be examined. The relationship between the major partners in Sudan’s oil consortium and the government of Sudan is of particular interest, as well as their role and stake in the industry. A key part of the report will look at the extent to which the government of Sudan has attempted to control and protect oil operations by implementing strategies of divide and rule and fomenting conflict between various groups. The humanitarian impact of such actions has been devastating to local populations and is documented in detail.

BACKGROUND TO THE CONFLICT

In the early eighties, it was discovered that Sudan may be sitting on 1 per cent of the world’s oil reserves. Some analysts suggest that the control of this resource became a root cause of the on-going conflict in the country. The existence of oil reserves and a rejuvenated oil industry is certainly an important factor which plays a large role in the war, but it should not be misunderstood as a root cause of the conflict. The oil industry appears, however, to be an element which perpetuates conflict in the country, and provides less incentive for a negotiated settlement.3

1.The legacy of colonialism

To understand the current situation in Sudan, it is necessary to briefly look at the colonial legacy which entrenched Northerners in the state apparatus and left the South virtually undeveloped. Sudan was under Anglo-Egyptian rule between 1898 and 1956, and, during that time, the economic policies of the colonial authorities concentrated investment between the two Niles. Large areas of real estate were reserved for the religious aristocracy by colonial authorities, in addition to agricultural land and government contracts, all in an attempt to protect the interests of sectarian families.4 Throughout the country development was uneven and the South was treated as a closed district, particularly in the 1930s and 1940s when the British barred travelling to the South by Northerners without a permit. Southerners had little voice in the running of the country, with no public participation to speak of.5 This legacy created a situation of elite domination in which the Northern elite would go to great lengths to protect their power and position.

2. Elite domination

After independence from colonial rule in 1956, much of the open conflict that broke out between groups in the North and South was the result of the North striving to exert its dominance over the South. Those in the South were fighting against political marginalisation, economic neglect and cultural domination. While efforts on the part of the North to Arabise and Islamise the South began at independence, these strategies had more to do with ensuring control over the various groups in the country than religious zealotry. A brief respite in the fighting occurred in 1972 with the Addis Ababa peace agreement, which allowed the South to have an elected regional assembly, making it an island of democracy within the autocratic Sudanese state.6 This autonomy disturbed the internal stability of the regime and denied Khartoum immediate control over, or easy access to, the South’s mineral and oil wealth. This became problematic for the North as the nation’s economic crisis deepened. As a result, the Northern powers attempted to redraw the borders between North and South, which was unsuccessful, and subsequently created a new province, removing the oilfields altogether from Southern jurisdiction.7



3. From elite domination to holy war

The civil war was re-launched in 1983 when the Sudanese government imposed Sharia law on the whole country, which was unacceptable to many in the South. The coup of 1989, that introduced a military regime led by religious extremists of the National Islamic Front (NIF) was a turning point in Sudanese history. The party had earlier been known as the Muslim Brothers, and these new rulers managed to transform the conflict in Sudan from one based primarily on class interests into one of religious struggle and holy war. The NIF government was intent on establishing a theocratic state, even to the extent of exporting its version of Islam to neighbouring countries. From 1989, the nature of the state changed, with religious fanatics propelled to positions of power. Between 1989 and 1994, 73 000 professionals were dismissed to make way for religious extremists.8 The goal of the government of Sudan was to make 1 mn square miles of Sudan an Islamic state. This vision of the country is different from that held by many in both the North and South who are fighting for a secular and democratic state.9

OIL AND THE SUDANESE ECONOMY

1. Sudan’s debt burden



To understand the significance of oil and the revenue it generates, it is necessary to examine this resource in the context of the Sudanese economy. The potential oil revenues on offer to the NIF is a fresh injection of cash at a time when the state is broke and the debt burden is 250 per cent of Sudan’s estimated Gross Domestic Product (GDP). The debt currently stands at US$20 bn and the government cannot secure loans from outside creditors anymore.10 In 1997, Sudan was almost expelled from the International Monetary Fund (IMF) for failing to pay its arrears. Since then the IMF has maintained a presence in Khartoum to pressurise the government to implement economic reforms, cut the deficit, lower inflation, and privatise state companies. The current monthly interest payments on Khartoum’s loans total $4.5 mn.11



2. Revenue needed to fund the war



It is difficult to meet debt payments when the regime is spending an estimated $1 mn a day to fund the war effort.12 The government cannot continue to fund its war effort if it also intends to honour its interest payments and run its economy, which is presently stagnant. The economy is reliant on agriculture, with the main exports including cotton, livestock, sugar and Arabic gum. Sudan has recently experienced the near collapse of its rural economy, with cotton production falling to one third the level of production in the 1980s.13 New oil revenues will thus provide a cash windfall, which will allow the government to fund its war and purchase new military hardware, which is likely to tip the military balance in its favour. The greater availability of oil will also solve the military’s problem of fuel shortages, which have constrained the number of military raids the airforce has been able to carry out. If the government feels that this new revenue will enable it to win the war outright, then it places the regime in a bullish position, making it more likely to rescind from negotiations.

3. Expected oil revenue



The oil revenues do not present a substantial amount of money, but their importance lies in the fact that it is an influx of hard currency which virtually equals the amount of money the government is currently spending on the war. The Sudanese minister of state at the Ministry of Energy, John Dore, recently said that Sudan would earn $200-$300 mn a year from oil exports, which would help the government pay its oil import bill.14 More than a quarter of the country’s total imports is oil.15 The country’s local consumption needs (both civilian and military) are approximately 50,000 barrels of oil per day. Domestic oil production will allow Sudan to import less oil and rely on its own reserves for local consumption. Whether or not the government will use the oil revenues directly for military spending is inconsequential as the available cash will ultimately enable it to continue funding the war. Islamic leader Hassan al-Turabi, who is the Speaker of the National Assembly and Secretary-General of the ruling National Congress, said on April 30, 1999 that the Sudanese government would use earnings on oil exports to finance factories which the government is building to produce tanks and missiles. ‘ We are currently building several factories to produce our needs in weapons, and we plan to manufacture tanks and

missiles to defend ourselves against conspirators’, Turabi said.16 The profits from oil revenues will be moderate for the first ten years, as the government will need to pay back its creditors. The Sudanese government is pleased at the 80 per cent rise in oil prices over the past couple of months.17 The first export shipment of oil from Sudan is expected in the third quarter of 1999.18

4. Oil reserves and production capacity



The Sudanese government is counting on production of 150,000 barrel per day in 2000, which is likely to increase steadily over time. The new $1 bn oil pipeline, which was recently completed between the Heglig oilfields and Baishir, South of Port Sudan, has the capacity of carrying 450,000 barrel per day if booster stations are added.19 It should be noted that the smaller oil pipeline between the Unity field and Heglig concession has not yet been completed, and will delay the flow of oil from Unity field reaching the Red Sea. Given that the known commercial oil reserves amount to 800 mn barrels, if 100,000 barrels are exported per day without disruption, then there will be enough oil to be pumped for 16 years. It should be remembered that there are large areas of southern Sudan where oil is suspected to exist but has yet to be explored. The three main oilfields at present are the Heglig oilfield which is situated in southern Darfur and southern Kordofan, Unity oilfield in the Bentiu area of Unity state, and Adar oilfield in Western Upper Nile. Oil production at the Adar field has been temporarily suspended due to fighting between rival militias in the area, but the field is capable of producing 20,000 barrels per day. Unity oilfield is producing an average of 35,000 barrels per day and Heglig field 25,000 barrels per day.20 Both the Unity and Heglig fields could produce 50,000 barrels per day respectively. The government of Sudan hopes that with exploration drilling it can raise its production capacity to 270,000 barrels per day within one year.21


OIL EXPLORATION AND PRODUCTION

1. Early exploration



To understand the oil industry in Sudan today and how far it has progressed since oil exploration began in 1959, it is useful to trace the history of upstream oil activity and identify the key players involved. Numerous multinational companies have been tempted by the prospect of lucrative oil wealth in Sudan, but it took twenty years before the first oil was discovered in 1979. Before this much of the oil exploration took place offshore in the Red Sea, and was undertaken by companies such as Italian Agip Mineraria, Oceanic Oil company, Texas Eastern Company and Union Texas. The results of this exploration were largely negative except for a gas find by Chevron, 120 km south east of Port Sudan in 1974. Oil exploration began in the south west of Sudan in 1975, with Chevron acquiring a concession in the Muglad and Melut basins.

2. Oil discovery and its implications



The most significant oil discovery came in 1980 when the Unity oilfields, two hours North of Bentiu was discovered. A year later, another major discovery was the Adar oilfield, which was drilled by Qatar’s Gulf Petroleum Corporation, Concorp and Sudapet. The third significant oil discovery was that of the Heglig field in 1982, 70 km north of Unity field. The early eighties thus saw numerous discoveries of lucrative natural resources, especially in a country heavily reliant on agriculture for hard currency earnings. The significance of these discoveries was not lost on the Sudan Peoples’ Liberation Army (SPLA) which had re-launched the armed struggle against the North in 1984, following the imposition of Islamic Sharia law by the Khartoum regime. Oil operations became a primary target for rebels who were intent on weakening the government and denying it of resources. In 1984, the SPLA attacked the oil operations of Chevron in Unity field, killing three employees, and prompting Chevron to abandon its $800 mn investment in the area and pull out of Sudan.22 This incident has not been easily forgotten by oil companies, which have since entered into oil operations in the midst of the war.


3. Canadian involvement

In 1992, the Sudanese company Concorp bought Chevron’s concession and subsequently sold it to the Khartoum government. The NIF then sold this concession in 1994 to a Canadian-based company called State Petroleum Company, which was shortly thereafter bought by Canada’s Arakis Energy. Arakis was taken over by Talisman Energy in 1998, Canada’s largest independent oil and gas producer. Talisman is also the third largest independent oil producer in the world.23 Arakis had not been able to raise the $400 mn it was obliged to pay to the oil consortium for its share of the pipeline costs. It relied on a $750 mn financial deal with a Saudi Arabian investment group that fell through, sending shares plummeting. Talisman offered greater financial backing to the Greater Nile Oil Project (GNOP) and Arakis shareholders agreed to a friendly takeover.

4. US exclusion from Sudan’s oil industry

With the exit of Chevron, American influence in the oil industry in Sudan has been minimal. Many American companies were dissuaded from pursuing any oil interests in Sudan after it was blacklisted with seven other African countries under the 1996 Anti-terrorism Act, along with Iraq, Iran, Syria, Cuba, North Korea and Libya. The law banned any financial transactions between American corporations and countries supporting terrorism. After aggressive lobbying of the Clinton administration by Canadian oil executives who wanted American partners to develop oilfields in Sudan, the White House made a special exemption for Sudan. California-based Occidental Petroleum Corporation, a big financial supporter of the Democrats, had been seeking a stake in the billion dollar oil deal of which Arakis Energy of Canada was a part. It was Arakis’ Chief Executive Officer John Mcleod who had lobbied the White House to exempt Sudan from the act in order to secure Occidental’s participation in the oil project.24 Ironically, it was the Khartoum government which excluded Occidental from participating because it was concerned about American presence in the oil areas when the Clinton administration was providing military assistance to Uganda, Kenya and Ethiopia, who were supporting the rebels in Sudan.25


5. US policy towards Sudan



Since the introduction of the Anti-Terrorism Act in 1996, the US administration was targeted by other lobbyists on the payroll of companies such as Arakis in an effort to soften America’s foreign policy towards Sudan. One notable example is the campaign of Ijaz Monsoor to influence American policy-makers and promote engagement with the NIF regime. Ijaz Monsoor was on the advisory board of Arakis before it was taken over by Talisman, and is also the Chairman of a private New York firm, Crescent Investment Management. Monsoor is particularly interested in new oil field development and seeks to further his business interests through changes in US policy towards Islamic countries, particularly Sudan. The Washington Post’s David Ottaway documented direct fundraising activities on the part of Ijaz Monsoor for the Democratic Party. During the Clinton/Gore campaign in 1996, Monsoor raised $525,000 for the Democratic Party, $250,000 coming from his own personal funds, and $200,000 from a private fund-raiser he held for Al Gore.26 As a result of his fundraising activities, Monsoor was able to exert influence and gain access to top administration officials, urging individuals such as National Security Advisor Samuel Berger to adopt a policy of constructive engagement towards Sudan.27 Monsoor also testified before the US Congress against the imposition of economic sanctions against Sudan in 1997. This type of behind the scenes lobbying is important because it reveals the extent to which a Canadian oil company operating in Sudan attempted to influence the foreign policy of a world power towards the government of Sudan.

The US congress has recently toughened its stance on Sudan. This may bring more pressure to bear on the government in Khartoum and create negative publicity for the foreign oil companies currently operating in Sudan. On June 15, 1999, the US House of Representatives passed Resolution 75 by a vote of 416-1, declaring the Khartoum government’s conduct in the civil war in the south of Sudan to be genocidal.28 In addition to such a pronouncement, US lawmakers said on 27 July that they plan to introduce a bipartisan bill in the Senate that they hope will help bring an end to the 16-year civil war ravaging Sudan. The proposed Senate bill would strengthen economic sanctions against Khartoum until the government makes credible progress toward a verifiable peace agreement. The bill would also try to end Sudan’s veto authority over famine relief flights by creating contingency plans and alternative routes for delivering humanitarian aid to

regions hit by famine. The US policy towards Sudan, together with the Khartoum government’s

attitude towards American companies, has ensured that US multinational oil companies are excluded from the oil industry in Sudan for the time being.

However, US policy has not deterred other foreign multinationals from filling the vacuum, and in recent months companies have been clamoring to ensure a stake in the exploration and development of oil fields which hold great promise. Some industry analysts estimate that Sudan could have 12.5 bn barrels of undiscovered oil, which would make it one of the world’s largest oilfields.29 Even oil giants like France’s TOTAL Oil are contemplating resuming oil development in Sudan, specifically in the South’s Block B concession which TOTAL abandoned in 1984.30

6. The formation of the Greater Nile Oil Project

The main oil consortium which is responsible for oil production and exploration in Sudan is the Greater Nile Oil Project (GNOP) which is comprised of four companies that control 12.2 mn acres of concession land. The China National Petroleum Company (CNPC) has the largest stake with 40 per cent, followed by Malaysia’s Petronas Carigali with 30 per cent, Canadian-based Talisman Energy with 25 per cent, and Sudan’s National Oil Company, Sudapet with 5 per cent. Sudapet’s small stake in the consortium can be attributed to the fact that the Sudanese do not have the skills or resources to warrant them to assume a larger role, but Sudapet would like to maintain a presence in the consortium to increase its knowledge on oil production and operations. The consortium is committed to drilling 30 new development wells and 21 exploration wells. These companies have had to borrow huge sums of money from international commercial banks to finance the project. Approximately $1 bn was invested in building the oil pipeline, and another $600 mn in building an oil refinery 70 km north of Khartoum at al-Jayli. Other foreign companies have also been responsible for covering start up costs with the promise of a share in future oil revenues. The Chinese have been heavily involved in supplying and laying the pipeline, while the Argentineans have been responsible for telecommunications, the Germans have provided equipment, and the British have supplied power generators.31

Other companies such as the International Petroleum Company (IPC) of Canada have been

operating in areas congruent to those of the GNOP, primarily undertaking oil exploration activities. IPC is a subsidiary of the Swedish-based Lundin Oil, and has a 40 per cent stake in Block 5A which lies near the Heglig field where Talisman is operating. The other partners in Block 5A are Petronas of Malaysia with 28 per cent, OMV of Austria with 27 per cent, and Sudapet with 5 per cent. One of the most recent accomplishments of the Block 5A consortium was the completion in May 1999 of the drilling and logging of Thar Jath oil well, which is a large and well defined prospect. To date, the operations in Block 5A have been low key and not subject to the same kind of attention which the operations and partners of the GNOP have received. This is primarily due to the fact that Block 5A operations are largely confined to exploration, and without a mandate to produce oil, the operations have not been highly controversial or the target of rebel attack.

It should also be noted that the Netherlands-based Trafigura Beheer BV recently won a three-month oil marketing contract with the GNOP, and will handle the initial sales and promotion of Nile Blend crude from Greater Nile’s concession in southern Sudan. Trafigura won the bids from Vitol SA of Switzerland, Arcadia Group PLC of the United Kingdom and Swiss trading firm Glencore International AG among others.32

The formation of the Greater Nile Oil Project has been briefly described, but a comprehensive overview of the oil industry in Sudan would not be complete without analysing, in detail, the relationship between the three main consortium partners and the NIF. Each company has its own agenda, as does the government of Sudan and the partners not only have specific roles to play in the development of the oilfields but each brings different expertise, which are essential to the project. International competition for stakes in the consortium was fierce, with many multinationals vying for a part in the project. The choice of the government of Sudan as to which companies would be responsible for oil production was strategic in many ways and, in addition to criteria such as experience, expertise and resources, the government selected partners it felt it could trust. The Chinese, Malaysians and Canadians were three partners who met these criteria.


TALISMAN ENERGY OF CANADA

1. The advantages of Canadian involvement



The major advantage of having Arakis/Talisman holding a 25 per cent stake in the GNOP was Canadian oil exploration and production technology, which was desperately needed to find the oil. Canadian oil companies have an excellent reputation for finding oil with advanced technology, which is the type of expertise the CNPC could not offer. The Sudanese also needed the Canadians to overcome the processing difficulties posed by Sudanese oil, and the logistical demands in getting the oil to port.33 In addition, the Canadian company provided technical and managerial skills which were invaluable to the Sudanese. Talisman has provided the much needed financial backing to the oil project which Arakis had not been able to muster. At the time of the takeover, Talisman invested $500 mn dollars in the project.34

2. An issue of trust



In addition to the technical expertise that made Arakis and the Talisman a valuable partner in the oil project, the government of Sudan had personal connections with top executives in Arakis that they trusted. This was a key factor when entering into a joint venture in the context of a civil war. Senior figures in the NIF had friendly relations with the Chair of the Board of Arakis, Lutfer Khan, an astute businessman of Pakistani origin. The NIF Minister for External Security, Qutbi Mahdi, had been instrumental in brokering the oil production sharing deal with Lutfer Khan of State Petroleum Company. Qutbi Mahdi was familiar with Canadian circles as he studied at a Canadian university. Mahdi had also personally invited Petronas to be involved in the oil consortium, and had met with former deputy Prime Minister of Malaysia, Anwar Ebrahim. Mahdi believed that Khan was supportive of the government in Khartoum and Khan went out of his way to make this point. When the NIF sold Chevron’s oil concession to State Petroleum Company, Lutfer Khan sealed the deal by arranging the marriage of his son to the daughter of former NIF Finance Minister Abdel Rahim Hamdi.35 Hamdi is considered to be an old guard member of the

NIF, who had been the editor of the Muslim Brotherhood newsletter in the 1960s. Hamdi eventually sat on the advisory committee of the board of Arakis.36 Khan also hired the Sudanese Minister of Energy’s two brothers to run his oil companies. The links between top NIF officials and State Petroleum Company can be traced back prior to its official involvement in the Sudan oil industry. It was the NIF Minister for External Security, Qutbi Mahdi, who had been instrumental in brokering the oil production sharing deal with Lutfer Khan of State Petroleum, when the NIF sought to bring the Canadian-based company on board.

Apart from these personal connections, Arakis had proven a loyal partner on the ground in Sudan. Before Arakis was taken over by Talisman, Arakis spokesperson Kristine Dow admitted to the Toronto Star’s Middle East reporter that Arakis had serviced broken military trucks of the NIF. Arakis not only provided electricity lines to NIF military barracks, but also piped water into army camps.37

3. A potentially lucrative deal



While Talisman’s involvement provides obvious advantages to the oil project, the venture is also considered highly lucrative for Talisman itself. The Sudan project is expected to fuel strong rates of growth in volumes and cash flow over the next several years that would be difficult to achieve in Canadian domestic fields for a company the size of Talisman.38 Industry forecasts predict that the production from the project will increase from 32,000 barrels per day in 1999 to 150,000 barrels per day in 2000, 165,000 barrels per day in 2001, and 190,000 barrels per day in 2002.39 Sudan is one of Talisman’s four main operations, the others being in Indonesia, the North Sea and Canada. Companies the size of Talisman are currently facing the prospect of their growth stalling or at least being difficult to sustain, and thus many are establishing an international presence. Talisman has been successful at making the transition, and international production is expected to account for 50 per cent of the company’s production in 1999.40 Talisman’s shares have been at their highest levels yet this July at around CAN$43 a share, compared to CAN$22 when


Talisman first took over Arakis.41 The investment community has appeared supportive of Talisman’s operations in Sudan, with the general view that it is a solid company. While the project in Sudan certainly carries with it a higher risk factor, this seems to have been largely overlooked by investors. It should be noted that the third largest Canadian institutional shareholder in Talisman is the Ontario Teachers Pension Fund, which holds 4.5 mn shares valued at $122.4 mn.

4. Shareholder concerns



There are Talisman shareholders, however, who have been less enthusiastic about Talisman’s involvement in the Sudan, such as church groups which hold in excess of 100,000 shares.42 Eleven churches and religious orders from Canada and the US, which hold Talisman shares, have expressed their concern that the company may be materially aiding the Sudanese government in its civil war and the violation of human rights. This is a controversial issue, which has been fanned by media coverage across Canada and demonstrations against Talisman by local Canadian lobby groups. Talisman has responded to these allegations by arguing that development in general is better than continued stagnation, and is welcomed in the areas of Sudan in which the company operates. The President and CEO of Talisman, Jim Buckee, has also noted that oilfield development in central Sudan was underway before the Canadians arrived, and would proceed without the Canadians if need be. It has been argued that the oil project is better off with Talisman’s participation because there will be stronger western influences and the introduction of Canadian standards in the areas of health, safety and the environment. Despite some negative publicity, Talisman continues to plan the expansion of its operations in Sudan and is enthusiastic about its role in the oil consortium in future. The production sharing agreement that Talisman has with the government in Khartoum has a term of 25-years for the exploration blocks and a 20-year term for the development block, all of which commenced in November 1996. Both have five-year renewal options. The consortium will also own and operate the pipeline for 15-years.43

CHINA NATIONAL PETROLEUM COMPANY

The relationship between China and the NIF is probably one of the most significant factors to consider when analysing the oil industry in Sudan. The economic collaboration between the two

countries in terms of trade, the development of the oil industry, infrastructure and financial assistance have escalated to such an extent that China appears to have become one of Khartoum’s greatest allies. It is very much a symbiotic relationship, China is in desperate need of a secure source of oil in the long-term, while Sudan needs the external credit, investment and market for its oil. This relationship should be of concern to forces attempting to push forward the peace process in Sudan, as China has a vested economic interest in making sure the NIF stays in power. The Sudanese government is very much indebted to the Chinese government at the moment, and has also brokered oil deals with the Chinese whereby they will be repaid for their substantial investment in the oil industry in the form of future oil deliveries. The SPLA has made it clear that it would not honour these oil deals or repay debts incurred by the government in Khartoum if it were to gain political control over southern Sudan.

1. China’s need for oil



The extent to which China needs oil as a resource goes a long way towards explaining its strong ties with the Khartoum government and its desire for Sudan’s promising oil reserves. The reality that China faces is that it will need to become a net importer of oil by the year 2000 if it is going to continue with its modernisation plans. China is rich in oil resources, producing over 150 mn tons of crude oil annually. It also has verified total oil deposits of 17 bn tons.44 China’s petroleum development strategy is to rely mainly on domestic resources, while speeding up Sino-foreign cooperation in exploring Western China and offshore oil and gas resources. A major strategy is to step up efforts to tap international oil markets.45 China plans to turn out 10 mn tons of crude oil through its overseas production by the turn of the century. By the year 2010, China will try to develop an annual overseas oil production capacity of 50 mn tons, in addition to an annual gas supply of 50 bn cubic meters from abroad.46 The CNPC has successfully obtained the shareholding, operational and leasing rights of oilfields in Peru, Canada, Thailand, Kuwait, Venezuela and some other countries. In the coming years, China is expected to develop transitional oil production focusing on the Middle East, Russia and Central Asia.


2. A mutually beneficial venture



The significance of CNPC’s operations in Sudan is that it is the largest oilfield construction project China has undertaken overseas, as well as one of the largest co-operative oil projects in the world. Recently, the CNPC shelved two of its largest overseas projects: a $1.2 bn production sharing agreement with Iraq and a $3.5 bn pipeline project to move Kazakhstan oil to China.47 China’s operations in Sudan will help to improve its expertise in drilling oil inland. The GNOP is important to China not necessarily for the value of the oil that will be produced, but for what the oil represents. The Heglig and Unity oilfields represent a stable source of oil which is necessary in China’s drive to modernise.

As valuable as the oil project is for China, China’s involvement is equally beneficial to Sudan. Just as Canada brings to the consortium its expertise and oil technology, China brings extensive knowledge and experience in pipeline and oil refinery construction. China has built numerous pipelines in the past, and is currently involved in building a gas pipeline in Thailand, transnational oil and gas pipelines in Turkmenistan, as well as oil refineries in Kuwait and Malaysia. China can also provide its own labour for the construction of a major pipeline such as the one in Sudan. Approximately 7,000 Chinese labourers have been engaged in the Sudan oil project, many laying pipeline in what some describe as the most hostile conditions known to man.48 Reports have surfaced that at least 2,000 of the Chinese labourers are prisoners who have been promised a reduction of their sentences in exchange for their labour.49 It has also been reported that 20,000 Chinese labourers, with probable military training, are to be used to protect China’s investment in the oil project.50 China completed the oil pipeline on schedule and this was appreciated by the NIF regime and confirmed China’s commitment to the oil industry in Sudan.

3. Chinese trade and investment

China has invested heavily in the country. It has initiated $20 bn worth of development and infrastructure projects involving dams, hydroelectric power stations, textile mills and agricultural schemes. It has also promised to contribute $750 mn in the construction of the new Khartoum International Airport, and another $750 mn for a new dam on the Nile, near the Northern

province.51 Approximately $100 mn has been spent by the Chinese on textile plants, and $500 mn on a recently constructed oil refinery. China has also provided Sudan with over $12 mn in soft loans to fund a fishing project in the Red Sea.52 Other economic ties have involved arms transfers between Beijing and Khartoum. China has supplied the Khartoum government with arms since 1985, with transfers between 1985 and 1989 totaling $50 mn.53 China became one of the government of Sudan’s principal arms suppliers in 1994 and still remains today.54 China is a preferred supplier in that it attaches no conditions to its arms sales other than monetary ones and oil concessions, and its weapons are relatively cheap. China sold Sudan SCUD missiles in 1996 in a deal underwritten by a $200 mn Malaysian government loan against future oil extraction.55 In 1990, the Sudanese government signed a deal worth $400 mn whereby China would supply arms to Sudan and receive cotton in return.56 It is not unusual for Beijing to offer the NIF soft loans for arms purchases, and one such loan is payable as late as 2005. A high ranking Eritrean military official reportedly criticised these arms transfers in discussions with Chinese officials, who subsequently defended their right to make such sales.57

4. A loyal ally

China has made it clear to the international community that it will tolerate no criticism of the government in Sudan. It has also used its position on the United Nations (UN) Security Council and on UN committees to block any action against Sudan and to silence opponents of the government of Sudan. As a permanent member of the UN Security Council, China has rejected the imposition of sanctions against Sudan, and has also stressed that it is opposed to any intervention in the internal affairs of Sudan under the pretext of human rights violations.58 China recently used its position on the NGO decertification committee at the United Nations to discredit an NGO which had been publicly embarrassing the government in Khartoum by exposing the alleged practice of government supported slavery. Being largely influential in the committee alongside Yemen and Ethiopia, China aggressively lobbied against the NGO, Christian Solidarity International (CSI). The committee subsequently recommended that the CSI be

deprived of membership at the Human Rights Commission in Geneva. This recommendation was

based on the fact that CSI had invited SPLA leader John Garang to address the UN Human Rights Commission.59 The fact that China defends Sudan even at the foreign policy level is indicative of its loyalty to the government of Sudan and the significance it attaches to the oil reserves which are its main strategic interest in that country. For as long as China and Sudan maintain close ties, Khartoum is likely to reap the benefits of a thriving oil industry, provided it is not disrupted by sabotage as part of the armed conflict.

PETRONAS OF MALAYSIA

Like the CNPC, Petronas Carigali is a state owned company, and its operations are very much an extension of the Malaysian government’s foreign and economic policy. The relationship between the Sudanese government and the Malaysian government is very similar to that with China in a number of ways. Trust has been developed between the two governments over the years. There have been notable economic transactions and Malaysia has displayed a willingness to invest in Sudan the same way as China. It should also be noted that Sudan’s Islamic banks have been heavily involved in Malaysia since the NIF took power. Malaysia’s loyalty to the government of Sudan was clearly displayed in 1997 when it paid $500 mn to the IMF on behalf of Sudan, in order to cover some of Sudan’s debt payments.60

1. Economic ties

One of Malaysia’s greatest ventures in Sudan, apart from the oil project, has been plans to manage the country’s transportation system. This has become an increasingly important sector with the development of the petroleum industry, as tankers will be needed to transport huge volumes of oil from storage facilities to ports for export. The Malaysian company Metrobus has also agreed to supply 1500 buses in several stages to Sudan.61 Following the bilateral commercial accords signed between Sudan and Malaysia in 1998, other projects have been initiated, such as a Malaysian oil palm plantation project in Sudan and the setting up of power generation plants.62


2. Alleged arms transfers

It is possible that the Malaysian involvement in covert arms transfers to Sudan has also won it favour with the government in Khartoum. According to Human Rights Watch, official documents have allegedly surfaced which detail Malaysia’s coordination in concluding arms deals between the Sudanese government and arms dealers in southeast Asia. According to the former Administrative Attaché at the embassy of Sudan in Kuala Lumpur, Abdel Khattab, heavy armaments including aircraft, tanks and mortars were procured in 1997 from China, Indonesia and the Russian mafia. These items were allegedly shipped to Sudan under the guise of petroleum exploration equipment, under the names of Petronas and the CNPC.63 The documents are said to reveal that a Malaysian government loan of $200 mn and funds collected by Islamic charity organisations were used to pay for the arms.64 Khattab defected to the opposition and sought political asylum in the Netherlands. If the allegations are credible it would directly implicate the two major partners in the Greater Nile Oil Project, CNPC and Petronas (together holding a 75 per cent stake), in arms transfers to the NIF. Being state owned companies it is hard to hold them accountable for such actions, particularly when there are no public shareholders who can bring pressure to bear on company executives.

Over and above Malaysia’s value to the government of Sudan in terms of potential military assistance and investment, the Malaysian National Petroleum Company, Petronas, plays an important role in the GNOP, and is the second largest stakeholder. It also owns a substantial percentage in the IPC oilfield adjacent to the Talisman operations in South Sudan. Petronas has extensive experience in oil exploration and the development and production of oil and gas overseas. The company is currently engaged in exploration and development activities in Vietnam,

Syria, the Philippines, Pakistan, Turkmenistan, China and Iran.65

OIL-RELATED CONFLICT

In many ways the partners of the GNOP, with their expertise and resources, have revived Sudan’s oil industry and, in the process, heightened the profile and significance of oil operations. This has

had a direct impact on the level of conflict surrounding the oilfields as the regime strives to protect and control oil areas while the opposition forces have identified the industry as a strategic

target. This is not a recent phenomenon, however, as oil operations have been a target of the SPLA since oil was first discovered in the early eighties. Since then the Sudanese government has implemented divide and rule strategies in an attempt to ensure its control over oil resources, with the effect of exacerbating armed conflict in the areas surrounding the oilfields. The strategies of the government of Sudan in terms of forging alliances and dividing its enemies have created many of the dynamics which exist today between armed factions that are continually locked in conflict. It is useful to trace the development of conflict around the oilfields in order to determine to what extent the oil industry has perpetuated conflict in Sudan.

1. Protection of the oilfields: NIF priority

Ever since the SPLA successfully managed to attack Chevron’s oil operations in Unity field in 1984, and bring about the withdrawal of Chevron from the oil industry, a key priority of the NIF has been to prevent similar disruptions and maintain firm control over oil areas. The strategies that the government of Sudan has used even from this early stage have not only fomented conflict but has had devastating consequences in terms of human security. One such suspected strategy that appears to be employed today is to clear oil rich lands of local inhabitants in order to enhance security around the oilfields. In 1984, the Nuer of Bentiu, surrounding the Unity oilfield, were overrun by militias armed by the government of Sudan. The government of Khartoum had supposedly instructed these militias to clear the oil lands of Nilotic inhabitants, using tactics such as massive air bombardments, raids and famine.66

2. Forging alliances

In the early eighties the regime also recognised that it needed to develop alliances with Southern factions which would be prepared to defend oil areas on behalf of the government of Sudan and fight against the SPLA. The regime found its proxy in Paulino Matip, who had belonged to the Southern separatist movement (Ananya) which fought the government between 1955 and 1972. He split from the mainstream to join forces with Ananya II to fight the SPLA. Capitalising on the opportunity to further divide Southerners and gain an ally, the regime brokered a ceasefire with Ananya II and began arming the Nuer forces of Matip in return for their military support. The

strategy worked as Matip’s militias became one of the most serious obstacles to the SPLA in the

Upper Nile between 1984 and 1987, as they would attack SPLA recruits on their way to training camps in Ethiopia. Ananya II also actively collaborated with NIF forces in attacking SPLA regiments, which threatened government-held areas.

In addition to maintaining an alliance with Matip, the Sudanese government encouraged further divisions within Southern rebel ranks, and sought to coopt other rebel leaders to fight alongside Matip in defending NIF interests and the oil areas. The second golden opportunity came when the former SPLA rebel zonal commander, Riek Machar, defected from the SPLA in 1991 and expressed interest in joining forces with Matip. This alliance was formalised in 1992 and brought additional Nuer forces into an anti-SPLA alliance. The regime supported these developments and sought to enhance divisions along ethnic lines between the Dinkas and Nuers in southern Sudan. The SPLA, under Dinka leader John Garang, was now in confrontation with rival Southerners under Nuer commanders Riek Machar and Paulino Matip. Machar made his alliance with the government of Sudan official by signing the Khartoum Peace Agreement of 1997 with the NIF and forming the South Sudan Defense Force (SSDF), which comprised the six former rebel factions which also chose to side with the NIF. As a reward, Machar became the head of the Southern Sudan Coordinating Council, formed by the Khartoum government to rule the South. He also assumed the position of assistant to the President of Sudan.

3. Dividing the opposition

By placing loyal forces around the oil areas, the NIF has made it increasingly difficult for the SPLA to launch successful attacks against the oil operations as any attack would require an open offensive. The advantage to the regime is not only that it has gained two Southern allies to protect the oilfields, but also that inter-ethnic conflict in the South will pre-occupy SPLA forces and deter them from attacking oil operations.

The ethnic divisions exacerbated by NIF policies have also been highly successful in weakening forces in the South, as any SPLA attack on Nuer forces in Unity State has been seen as a Dinka attack on Nuer land, thus provoking retaliation. The recent grass roots peace agreement which was signed in May 1999 between civilian representatives of the Dinka and Nuer, is a cause of concern for the NIF. A civilian peace threatens the web of conflicting alliances sustained by the government. While the main accomplishment of this agreement is likely to be the reduction of

looting and raiding between the two ethnic groups, it could hold greater significance if tribal chiefs

were to unite politically.

4. Divide and rule - even among allies

One of the greatest surprises in the NIF’s strategy to protect and control the oilfields has been its recent moves to exacerbate conflict between its own allies. The Khartoum government’s objective in this regard is to prevent any Southerner from becoming too strong within the oil territory.67 By allowing NIF allies to battle each other, the government is able to maintain overarching control. There is always the fear that one of the Nuer leaders, especially Machar, may redefect to the SPLA and thus the Sudanese government wants to prevent Machar and Matip from becoming too powerful militarily. Recently, Khartoum’s military commanders have been concerned about Matip’s domineering behaviour in Bentiu, especially after the June 1999 killing of two government of Sudan’s regional Ministers and two elderly chiefs.68 Regardless of whether Matip or Machar gain the upper hand in inter-faction fighting, real control will remain with the government in Khartoum.

The conflict between Machar and Matip commenced at the end of 1997, when they disagreed over who should govern Unity State. When Machar’s preferred candidate won the election in December 1997, Matip detained the new Governor’s agents and this led to internecine fighting between Machar’s forces loyal to Governor Taban Deng Gai and the forces of Matip. This dispute was merely a precursor to the more fundamental problems that emerged between the two faction leaders over who is responsible for protecting the oilfield in Unity State. The Sudanese government allowed this ambiguity to continue and armed conflict to develop over the issue. Machar believed that he had been charged with defending the oilfield from SPLA attack from the time of the 1997 Peace Agreement when he was stationed in the region. Given the NIF’s suspicion of Machar, they preferred that he protect the areas outside Bentiu while Matip positions his forces in the vicinity of the oilfield. The regime was then able to ensure that fiercely loyal Mujahedeen and SDF forces encircle areas where the oil operations are located. This layered system of protection is a rational strategy of the NIF and the factional fighting enables Matip to act as a counterbalance to Machar. The government has been arming Matip’s forces much to the chagrin of Machar who claims that he has a right to receive arms as he is also a Major-General in

the SDF. Each spate of fighting between the forces of Matip and Machar causes the massive flight of civilians. In May 1999 alone, conflict prompted 3-4000 civilians to flee towards the South. Abuses have included the abduction of very young boys for use as soldiers, abduction of girls and women for sexual abuse, and a number of summary executions of women, never recorded prior to 1999. The conflict continues to engulf Northern Unity State and while it may appear as intra-ethnic fighting, it is likely a government strategy to safe-guard its interest in the oilfield. The government needs the revenue from oil production to continue waging its war in the wider theatre, potentially making the very presence of oil operations a deterrent to peace.69

5.The new pipeline and the prospect of associated conflict

While the oilfields have set the stage for conflict, the new pipeline that traverses much of Northern Sudan presents an additional corridor for armed clashes. Opposition forces in Sudan have expressed their dissatisfaction at the total insensitivity of the multinational oil companies to the dynamics of the war situation and the willingness to provide the NIF with oil profits which could finance the war effort. The objective of opposition forces is to delay the flow of oil through the pipeline so that the NIF is denied the proceeds. In May 1999, the SPLA warned Talisman and its Asian partners that it considers oil operations and particularly the pipeline to be legitimate targets in its war against the government. The SPLA has followed through, albeit on a small scale, with those threats by attacking oil installations in Unity State and targeting the oil pipeline. Other opposition groups belonging to the National Democratic Alliance (NDA) have carried out similar attacks, such as the two major explosions which were carried out by Beja during the third week of July 1999 in the sea terminal of Baishir.70 The NDA has also claimed responsibility for the September 1999 bombing of the oil pipeline in the town of Atbara, 300 kilometers northeast of Khartoum which temporarily interrupted the flow of oil.

The SPLA has not been as active as it could have been in disrupting oil operations in recent months, but insiders claim that it intends to hold its fire until oil production is in full swing to wreak maximal damage both materially and morally. The SPLA has also discussed the need to solidify its position in the South by taking key government-held towns before it launches full-scale offensives against oil operations. While most of the oil pipeline is underground, the pumping stations remain vulnerable to rebel attack. The underground pipeline could also be attacked if its

location is known, and repair would be difficult especially if it were to be damaged in five or six places. The SPLA and the Sudan Alliances Forces (SAF) have opened up a new front on the Eritrean border, positioning themselves in striking distance of the pipeline as it approaches the Red Sea. The regime has foreseen the problem of SPLA attacks launched near the Ethiopian border, and has changed the original pipeline route envisioned by Chevron which ran through Kosti, to a route further westwards, well inside NIF controlled territory. It would be impossible for the government to heavily guard the length of the pipeline, which traverses the territory under threat from the rebels. The regime has attempted to put as much manpower as possible along the route, using largely unpaid militia forces known as mujahedeen. Active recruitment of thousands

of high school students and graduates is currently underway to join the ranks of the Defenders of the Oil Brigade. The Defense Minister Lt General Abdul-Rahman recently commented, ‘oil has become the real challenge...a contest between us and the evil spirited rebel forces.’71

THE HUMANITARIAN IMPACT OF OIL-RELATED CONFLICT

1. Land clearances

The widespread conflict which has resulted from the NIF’s determination to control oil resources has had serious humanitarian consequences for the civilian populations located in the vicinity of the oilfields. Long-term efforts by various governments in the Sudan to protect oil production have included a policy of forcible population displacement to clear oil-producing areas and transportation routes of southern civilians who were suspected of supporting sabotage actions by the SPLA. Reports recently received by the UN Special Rapporteur of the Commission on Human Rights, Leonardo Franco, indicate that this policy is still in effect. Death, famine and destruction have been part of the humanitarian impact of government or government-sponsored operations. It has been argued that local devastation and the killing of civilians is not merely a result of fighting between the government and its allies against opposition forces, but a systematic tactic on the part of the government to weaken the local population in these areas, and in some instances, to clear them off the land. The Christian Solidarity Worldwide (CSW) recently claimed to have evidence of such land clearances around the oilfields in Sudan and video footage of alleged government operations has recently been broadcast in Europe. It is the contention of CSW and other international observers who have visited the area that the government intends to r


remove people from the land surrounding the oilfields not only to increase security but also to explore the land for additional oil reserves. While it is difficult to verify the claims and interpretation of recent events made by CSW, its observations are worth mentioning in this paper as few outsiders have gained access to the oil regions and managed to interview local inhabitants.

In June 1999, Baroness Caroline Cox, deputy speaker of the British House of Lords and President of CSW, visited the areas surrounding the oilfields with a cameraman and a team of observers. A report was produced following the trip which outlined the results of extensive interviews with local inhabitants and detailed the team’s observations. In reaction to what she saw, Baroness Cox stated: ‘I have seen at first hand graphic, indisputable evidence that western investment in the oilfields of Sudan is fuelling the genocide of people in Ruweng.’72 In a written press release Cox also claimed that last August’s ceasefire, negotiated by the British government to save millions of people from starvation in Southern Sudan, has been broken by the Sudanese in a series of attacks designed to seize billion dollar oilfields.73 It is the contention of CSW that, 1200 government forces swept through Ruweng County, killing scores of civilians, abducting hundreds and burning over 6000 homes.74 Ruweng County borders the oilfield in Unity state. The report also states that in a 10-day offensive, Antonov bombers, helicopter gunships, tanks and artillery attacked civilians across a 100 km swathe of territory. Survivors of the attacks are supposedly living in the bush without shelter, water or medicine and are likely to face a slow death from starvation. The delegation claimed to have seen burned villages, hospitals, churches and craters created by Antonov bombings. The report notes that the survivors interviewed pointed to oil as being the secret reason behind the attacks.

The independent journalist who accompanied the CSW delegation, cameraman Damien Lewis, made a number of interesting observations following the June trip. Lewis, who has visited the oil areas on a number of occasions, believes that a pattern has emerged in the way the NIF deals with local inhabitants in the oil areas. On an earlier trip to Sudan in June 1998, Lewis visited the areas bordering the Heglig oil concession where a similar situation to the present one existed North East of Bentiu. Lewis contends that large-scale human rights abuses were being perpetrated by forces allied with the government and thousands of homes had been destroyed

almeno non nel '99, ma a leggere gli atti parlamentari ancora oggi non se ne fa cenno

QUALE PACE IN SUDAN

Il Sottosegretario italiano agli Esteri, Rino Serri, è personalmente impegnato nel rilancio del negoziato politico per la pace in Sudan. Lo abbiamo incontrato per conoscere le proposte del governo italiano.

a cura di Nicoletta Dentico





Una complicatissima matassa da sbrogliare, quella della guerra che assedia e affonda il Sudan da molti ani. Una tragedia di fame e schiavitù, di carestie e continue violazioni dei diritti umani compiute da tutte le parti che si confrontano sul terreno e che fanno pagare il costo più alto del perseguimento dei loro obiettivi alla popolazione inerme. Un dramma incancrenito dai ripetuti colpi di stato, dal retorico esercizio delle belle parole, degli accordi firmati e disattesi. O, viceversa, dalle chiusure blindate verso un regime sicuramente indigeribile , come quello di Omar el Bashir, ma che non può per questo essere escluso come interlocutore e negoziale. Mentre stiamo scrivendo, riprende il negoziato promosso dall’IGAD (organo di coordinamento regionale) tra il governo sudanese ed il movimento armato di liberazione dell’SPLA. Il governo di Khartoum, negli utlimi mesi, ha incontestabilmente -a parole- fatto molte aperture politiche, le quali peròdevono essere tutte verificate al tavolo negoziale. Dopo decenni di conflitto, e quasi due milioni di morti, si profila una possibilità di soluzione all’interminabile guerra del Sudan? Lo abbiamo chiesto al Sottosegretario agli Esteri, Rino Serri, da tempo impegnato personalmente in un estenuante negoziato tra le parti, regista suo malgrado dei contatti tra sudanesi.

D. Sottosegretario Serri, qual è la posizione del governo italiano sulla questione del Sudan?

R. Come governo italiano e co-presidente -insieme alla Norvegia- del "Gruppo Sudan" (istituito nell’ambito del "IGAD Partners Forum", ndr.), abbiamo appena fatto una missione a Khartoum , incontrando a Nairobi anche John Garang ed i dirigenti dell’SPLA. Noi abbiamo ormai una proposta definita, che si basa su un cessate-il-fuoco generale in tutto il territorio nazionale. Ma esistono molte resistenze tra le parti, delle difficoltà si riscontrano anche nell’opposizione armata dell'SPLA. Noi vogliamo il cessate-il-fuoco generale con controllo internazionale: questo è l’elemento di novità che bisogna portare al prossimo vertice dell’IGAD, altrimenti alcune diffidenze delle opposizioni sono giustificate. Vogliamo dare avvio alle trattative senza che alcuno ponga pregiudiziali. Se Khartoum accetterà una forma di controllo internazionale del cessate-il-fuoco - cosa ancora da verificare - dovrebbero cadere anche le resistenze dei gruppi di opposizione, aprendo la fase delle trattative sulla transizione. Deve essere chiaro, sin dall’inizio, che il governo di Khartoum accetta ormai il principio di autodeterminazione delle regioni del Sud, sebbene rimangano aperti altri problemi importanti, ovvero capire quali altri territori potranno avere forme proprie -come rivendicano- di autodeterminazione.

D. Si riferisce ai Monti Nuba, spina nel fianco di John Garang.

R. E’ il caso del Monti Nuba, che sono collegati all’SPLA di John Garang ma che non vogliono necessariamnete seguire il destino del Sud Sudan. Vogliono essere liberi di decidere se stare con il Sud, stare con il Nord o stare da soli. Questo sarà oggetto di un negoziato che si svilupperà successivamente, e dovrà essere affontato soprattutto da Khartoum. La questione Monti Nuba non può essere comunque una pre-condizione per il cessate-il-fuoco. Altrimenti questa guerra, che dura da decenni, rischia di distruggere completamente questo paese e la sua gente. Con l’ulteriore beffa che l’opzione militare non risolve alcuno dei problemi del Sudan. Bisogna prendere atto che non esiste una soluzione militare alla questione sudanese.

D. La RAI ha fatto vedere recentemente agli italiani immagini agghiaccianti del Sudan. Bambini scarnificati, donne che vagano da una città all’altra alla ricerca di cibo. Quale ruolo sta giocando l’Italia sul versante umanitario?

R. Abbiamo stanziato dieci miliardi per l’aiuto umanitario al Sudan, soprattutto al Sud. Non basta, lo so benissimo. Il fatto è che con la guerra in atto i costi per arrivare con gli aiuti umanitari sono terrificanti: equivalgono al 60% di quello che viene stanziato, una cifra enorme che va in trasporti, noleggio di aerei dal Kenya, eccetera. In termini di aiuti umanitari internazionali, il Sudan costa un milione di dollari al giorno, come mi ha detto il Direttore di ECHO, l'Agenzia Umanitaria Europea che a Bruxelles coordina gli aiuti. E' una situazione insostenibile, anche perché se non si fa la pace l’aiuto umanitario non potrà più far fronte alla situazione.

D. Lei smentisce, in qualche modo, l’importanza del fattore petrolio in tutta questa vicenda della guerra in Sudan.

R. Sì, sono assolutamente convinto che non si tratti di un fattore determinante.

D. Eppure si parla di ingenti giacimenti di petrolio "dietro" alla guerra. Entro la fine dell’anno, un nuovo oleodotto sarà completato per portare il greggio da Muglad a Port Sudan, nel Mar Rosso. Ci stanno lavorando cinesi, malesi, canadesi.

R. I tecnici dell’ENI -che hanno effettuato sopralluoghi- mi confermano che in Sudan c'è petrolio, ma in misura non rilevante. L’ipotesi è che ne possano esportare non più di 100.000 barili al giorno, che risulta essere una quantità limitatissima. Questa sarebbe la realtà, che coincide con le stime fatte dal governo, il quale parla di 100-150.000 barili al giorno al massimo della produttività. Per adesso non riescono a soddisfare neppure il fabbisogno nazionale. No, francamente io ritengo che il petrolio sudanese non sia la causa scatenante del conflitto, il quale peraltro è scoppiato molto tempo fa, quando neppure ci si poneva il problema.

D. Il tavolo negoziale dell’IGAD è "un tavolo per prendere e perdere tempo", come sostengono gli oppositori del Nord al regime islamico di Khartoum?

R. Il pericolo esiste, visto che adesso l’IGAD, con il recente conflitto fra Etiopia ed Eritrea, si è ancora più indebolito. Molto dipende anche dalla comunità internazionale. Non è un caso che noi, norvegesi e persino gli Stati Uniti (che pure finora non hanno mai aderito a questo negoziato) stiamo discutendo su come il "IGAD Partners Forum" possa dare un contributo finanziario, e soprattutto tecnico-logistico per condurre il negoziato. Siamo pronti a fornire l’aiuto e il sostegno necessari: in questa direzione ci siamo impegnati con il Ministro degli Esteri keniota Boyana Godana, che ha il mandato per condurre la trattative di pace, nel corso della nostra ultima missione. E dovremo lavorare tutti. Fino alla pace.


Vai al prossimo articolo del mensile Mani Tese di Aprile 1999

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