Sudan: Emerging From the Shadows - Upstream, March 9-15
The latest discovery of oil in Sudan by Sweden's Lundin and its partners is bound to deepen further the involvement of international companies in the nascent oil industry of the poverty-stricken African country despite howls of protests against Khartoum's tattered human rights record.
By Nassir Shirkhani
SUDAN, Mar 9-15 (Upstream) - The find in block 5 comes at an encouraging time for the companies, which can draw comfort from a new Bush administration that is known for its less hostile attitude towards investment in the energy sectors of rogue states such as Sudan.
George Joffe, an African expert with the School of Oriental and African Studies in London, believes that protests by human rights groups against child slavery and political repression will do little to deter companies from dealing with the government of Omar Hassan al-Bashir, a former army general who seized power in a coup 12 years ago.
The new discovery, described as significant by Lundin and partners OMV of Austria and Malaysia's Petronas, would therefore help increase the attraction of Sudan to investors. The largest African country by size, Sudan offers prospects of similar finds in future. Joffe says US President Geroge W. Bush is likely to turn a blind eye to the deeper involvement of foreign firms, given its pro-oil policies.
His views are borne out by the recent decision of Canada's Talisman Energy to reconsider selling its 25% stake in the southern Heglig concession, which accounts for Sudan's total daily output of more than 200,000 barrels.
Talisman had been toying with the idea of pulling out of the Greater Nile Petroleum Operating Company, which runs the concession, amid controversy pressuring its stock price.
The Clinton administration imposed sanctions on GNPOC but took no action against individual members like Talisman, which had come under scathing criticism from the previous US government and human rights groups for its role in Sudan. The Canadian company has now decided to stay put as it senses a change of policy in Washington following the election of Bush to the presidency.
Talisman chief Jim Buckee said recently the company had been looking for an escape route to abandon Sudan. "I can see the political climate vis a vis Sudan may improve, in which case now would not be a good time to sell."
Vice President Dick Cheney, former head of oil services group Halliburton, had vociferously campaigned against sanctions on US oil companies before being picked by Bush as his running mate during the presidential race last year. Cheney cannot take an equally vociferous stance for easing the sanctions while in office.
Church groups and other human rights advocates have accused Talisman and its Chinese and Malaysian partners in the Heglig concession of helping to finance Khartoum's war against the mainly Christian Sudan People's Liberation Army in the south.
They say the conflict over oil has worsened a bloody civil war that has claimed more than 2 million lives and displaced 4 million people since it erupted in 1983. The companies have countered criticism of their role in Sudan by increasing spending on basic amenities, schools and clinics to ease the plight of the long-suffering Sudanese.
A new US government report says the Khartoum regime and its militia have implemented a scorched-earth policy along parts of the main oil export pipeline and around key oil facilities to protect oil workers declared legitimate targets by the SPLA.
"These forces have destroyed villages and driven out inhabitants in order to create an uninhabited security zone," the report says. The displacement of thousands of civilians from the south has indeed served the government's objective of creating a secure place for oil workers by making it difficult for the SPLA to operate in the area.
While the civil war rages on, Bashir's government has displayed no appetite for ending it by accommodating the demands of the SPLA rebels seeking autonomy for the non-Moslem south. Nor is Bashir ready to be less tough towards opposition leaders in Khartoum. He recently detained former mentor and Islamist ideologue Hassan al-Tourabi for striking a deal with the rebels.
The opposition Umma party has declined to join the new government unless fresh elections are held and the government includes all the political forces. Umma is led by Sadiq al-Mahdi, whose democratically elected government was toppled by Bashir. Since his re-election for a second, five-year term in December, Bashir has been under pressure from opposition parties to restore political and press freedom and move to end the civil war. His recent acts, though, show he is in no mood to give in to those demands. But that is unlikely to act as a deterrent to foreign oil companies whose primary motivation is profit. |
