OIL POLITICS: A nation split by oil

OIL POLITICS: A nation split by oil

As Sudanese vote
this week on staying as one nation or becoming two, my mind goes back
to when civil war broke out in Nigeria in 1967. I recall that when
Biafra was announced, I leapt in celebration at the novelty of suddenly
being a citizen of a new country under a new flag and with a bearded
man at the head of state. What my young mind could not fathom, and did
not question, were the reasons for the emergence of the new nation.
What were the announced reasons and what were the unspoken ones?

Before we could
settle to savour the change expected from the split, things took a
different turn. The war drums sounded, and bullets began to fly.
Streams of refugees flooded through our village and soon enough, we
were on the move. I still recall seeing starving kids, rotting corpses
by the roadside, and I can hear the screams of young ladies who were
captured and forcibly married by rampaging troops.

We see the great
mobilisations by the peoples of Southern Sudan for a split and when the
result of the referendum is announced, we can bet that the result is
like a dream long foretold.

There are many
reasons why the South should be eager to drift away. Indices of
development from the country are severely skewed against the region.
Reports have it that over 80 per cent of the inhabitants of Southern
Sudan have no sanitation facilities.

While almost 70 per
cent of the people living in Khartoum, River Nile, and Gezira states
have access to pipe borne water, the people in the south depend on
boreholes and rudimentary water wells. They and those in the Darfur
area depend largely on food aid for survival on account of the
dislocation of the agricultural sector by entrenched violent conflict.

Certainly, all will
agree that oil is a major factor in the political fortunes of Nigeria.
We may squabble and bicker under the cover of ethnic or regional
differences, but beneath the surface, the struggle is over who controls
the massive oil and gas resources and revenues of the land. The
struggle for power at the centre was set the moment a unitary system of
government was decreed in 1966 and has since coloured the sort of
federal system that the nation runs on.

Oil is a principal
factor in the current political situation in Sudan. Exploration
activities started in the 1960s by AGIP, the Italian oil company, which
found natural gas in the Red Sea. The American oil giant, Chevron,
followed suit but never revealed what they found, according to reports.

Like Nigeria, like Sudan

As time went on, a
number of Chinese and Asian companies jumped in and finally oil was
produced from the Muglad Oil Basin, Blocks 2 and 4. Sudan is divided
into 17 oil concession blocks with SUDAPET, the government owned
company, working in joint partnership with the various Asian and
European oil companies.

As aptly captured
by a Sudanese academic in a recent Oilwatch Africa meeting, “Sudanese
oil has been developed against the background of war, international
sanctions, and political isolation. It has been developed at a time of
imposing demand by emerging economies like India and China and a time
of unprecedented soaring prices of both food and oil and the
controversial use of agricultural crops as a source of bio-energy.”

Quite like Nigeria,
oil produces over 75 per cent of the foreign exchange earnings of
Sudan. Other production sectors have equally been almost completely
neglected. Before oil, over 50 per cent of Sudan’s revenues came from
the agriculture sector, contributed 95 per cent of the export earnings,
and employed a high percentage of the total labour force in the country.

With oil as a major
economic factor, and seeing that the bulk comes from the South,
developments nevertheless eluded the region. An example can be seen in
the first refinery which was sited about 70 Km north of Khartoum. Crude
export pipelines runs northward and amount to about 5326 km in length.

The reality is that
with the available infrastructure, the South cannot export its oil
except through the North. In addition, as the date of possible
separation drew nearer, new oil blocks that transverse northern and
southern areas were being allocated.

Oil companies
operating in Sudan are exempted from paying taxes. The contracts were
mostly negotiated when the price of an oil barrel of oil was less than
20 US dollars. Surely, the companies operating here could not hope for
a better space for reckless exploitation and incredibly high profit
margins. Added to this is the fact that the regulatory regime is
largely non-existent and even the conduct of environmental impact
assessments are selective.

With Sudan having
about five billion barrels of oil in reserves and currently exporting
billions of dollars worth of oil per year, it must be painful for
Khartoum to let the oil rich South go. About 80 per cent of Sudan’s oil
exports come from the southern states. Only 50 per cent of revenue
accruing from oil goes to the South, a factor that undoubtedly stokes
the embers of discontent in the area.

As the peoples of
Sudan vote for the emergence of a new Southern nation, dreams of the
desperately poor and those traumatised by war and cruelties will run
high. Children who never experienced peaceful environments will be
marvelling at great possibilities. Oil has certainly greased the
engines of exploitation, oppression and war in Sudan. It is oiling the
machines of separation today. What will it lubricate next?

These are questions we must mull over, but a bigger question is over
the implication of continued fragmentation for Africa as a whole. At a
time when the continent should be coming together and erasing the
arbitrary boundary lines drawn by colonialist adventurers, we continue
to fragment. Certainly, this cannot be the only way to overcome poor
and parasitic governance.

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