BigBull, There's US $2 trillion on the sidelines right now....And I am slowly rotating out of energy stocks into tech stocks. NT's drop from 12 to 6 weeks on hand cuaght my eye. My concern also is that comparisons for energy stocks- except for oilfield service stocks will be more difficult moving forward....
War, famine and oil in Sudan
The Economist
Apr 12th 2001
RUMBEK
Sudan’s government has adopted a brutal new policy of clearing the oil areas
“ALL this because of oil,” laments Steven Mangong. Once a farmer in a small village in the heart of southern Sudan’s oil region, Mr Mangong is now living destitute in a refugee camp at Rumbek, 300km (185 miles) away. He and his family were forced to flee two months ago. “First I heard shooting,” he said, “then the sound of tanks and after that the bombs started to fall. We stayed in the area, hoping to be able to return. We have done that several times before. But this time the Arab militias and the government soldiers did not leave.” Scores of others at the camp tell the same story: “We southerners have been fighting the Arabs for a very long time, but this is a different war now. They fight for our oil,” said a fellow farmer. As an act of deliberate policy, the government appears to be depopulating their area.
A war between Sudan’s Arabic-speaking, Muslim north and the black African, Christian and animist south has swung back and forth for most of the past 45 years. But the discovery of at least 2 billion barrels of oil in a disputed region between north and south has changed the tactics of the government in Khartoum. Until the end of 1999, when the oil first started to flow, the government used to arm Arab militia groups in the border zone, and encourage them to raid their southern neighbours for cattle and slaves. This produced seasonal skirmishes, and caused distress, but did not result in a shift in population. Now the government wants the southerners out.
Oil has also given the government the means to buy new weapons, and to set up its own arms industry. A year ago it launched an offensive in the region south of Bentiu, sending its newly-armed militias to drive out the inhabitants, or even to exterminate them. The tales told by refugees at Rumbek are confirmed by a recent report by Christian Aid, a British-based charity. This finds that the government and the militias it sponsors are mounting “a systematic scorched earth policy in and around the oilfields”. It claims that tens of thousands of people have been killed since the construction of the oil pipeline to the coast began in 1998.
The southern rebel movement, the Sudan People’s Liberation Army (SPLA), has neither the firepower nor the unity to prevent the clearances. Last week it threatened to attack foreign oil workers, but it is unable to get near them at present or to offer any protection to southern villagers under attack. Moreover, in the 1990s the government exploited a split in the SPLA’s ranks, driving a wedge between its two largest ethnic groups, the Dinka and the Nuer, both of which live in the oil zone. Six factions led by local warlords are operating in the Nuer districts, living by the gun and carving out their own territory. Only one is linked to the SPLA.
Hunger, caused by nature and by man
Sudan is expected to experience two famines this year: some 3m people are at risk. One has already started, mainly in Darfur and Kordofan provinces; it is caused by drought. The other, which could affect 2.4m people, would be largely the result of war. Earlier this year the UN’s World Food Programme appealed for $135m for Sudan, but raised almost nothing. On March 29th, the UN appealed once again.
The emergency casts a spotlight on the role of the oil companies operating in Sudan. The companies will doubtless say, with truth, that they are providing food, shelter and development help for the victims. The catch is that they will present themselves as part of the solution, whereas some would argue that they are part of the problem. That is because they can operate only with the approval of a government that is ruthlessly clearing local people out of the oil areas, and using its oil revenue to finance the war.
Some of the companies, China’s National Petroleum Corporation, for instance, or Malaysia’s Petronas, are probably safe from domestic protest. But western firms—Canada’s Talisman Energy and Sweden’s Lundin Oil—are under mounting pressure from human-rights groups to pull out.
In America, the administration is being assailed by an increasingly angry lobby that includes black Americans, shocked by reports of slavery, and fundamentalist Christian groups, which support the south because it is partly Christian. The administration is also under pressure from American oil companies, several of which would like to join their rivals in exploiting Sudan’s new riches. After a Khartoum-backed assassination attempt on Egypt’s Hosni Mubarak in 1995, America imposed sanctions on Sudan, forbidding investment. But the companies are reluctant to risk association with Sudan until it changes for the better, and they would like America to help bring about that change. George Bush, reacting to these various lobbies, has ordered a review of American policy.
But prospects for peace have seldom looked more remote. One bid initiated by Sudan’s neighbours is moribund; another sponsored by Egypt and Libya is unacceptable to the rebel movement because it is predicated on the unity of Sudan. The rebels are standing out for a referendum on southern independence, to which the government reluctantly agreed in 1994. So long as the fighting continues, there is no chance of this. |
