Oil industry in Sudan has passed through different stages, our economic page Business and Finance is to publish
a serial of articles about oil in Sudan, and it is an opportunity to follow up the historical background about oil since early time up to the present.
We provide an excellent data to those who desire to invest in oil; our page (Business and Finance) is to review one of the important researches focus on oil.
The research is conducted by Ismail S.H. Ziada under the title (Oil in Sudan) its facts and impacts on Sudanese domestic and international relations, the book comprised of 4 chapters, in the first chapter the researcher assumed historical information about oil industry in Sudan, its production, reserve and the interest of companies, in the second chapter he focused on the role of oil in igniting civil war between South Sudan, we know that oil has affected the future relation between Sudan and the newly born state in 2011.
In chapter three the research talked about the impact of oil on Sudanese US relations since 1972 till 2006, but in the fourth chapter the book reviewed Sudanese Chinese ties and the role of oil which judged the nature of the relations.
The researcher considered that oil is behind the civil war in Sudan urging the conflicted parts to realize peace for the interests of Sudan, South Sudan and the region.
Petroliam Nasional Berhad (Petronas), a state owned Malaysian company has a 30% interest in GNPOC, a 40% interest in the Petrodar Consortium (blocks3,7), a 68.875% in block 5A, 39% in block 5B, 77% in block 8, and 35% in block 15.
Oil and Natural Gas Corporation Limited (ONGC), a state owned Indian company has a 25% interest in GNPOC, 26.125% in block 5A and 23.5% in block 5B. Lundin Petroleum, a Swedish company has a 24.5% interest in block 5B The French company Total has a 32.5% interest in Block B. The American company Marathon Oil Corporation has 32.5% interest in block B. Kuwait Foreign Petroleum Company has a 25% interest in block B. Cliveden, a Swiss company has a 37% interest in block C. Express Petroleum of Nigeria has a10% interest in block 15. 8
Oil and south-north civil war
Sudan suffered its first civil war between the 1956 and 1972. It was ended by the signing of the Addis Ababa peace agreement on the basis of which the south became an autonomous region. The second civil war broken out in 1983 as consequence of the collapse of the Addis Ababa agreement. The second civil war only ended officially in 2005. The oil discoveries made by Chevron in Sudan complicated the relations between south and north and played a major role in re-igniting Sudanese civil war in 1983.
The oil related disputes started in 1980 whenthe Sudanese president Numeiri announced a plan to change the borders between the southern and northern provinces and which divided the southern region into three states creating the Unity state around Bentiu where the oil rich areas are located. On the basis of this division plan the Unity State became part of the north.
This development was rejected by the leaders of the south who refused to accept it. The leaders of the south perceived the division planas an attempt by the central government to control the oil areas and deprive the south of the oil revenues. It should be mentioned that under the Addis Ababa agreement the southern regional government had the right to all profits on exports from the region. Another issue was a dispute over the pipeline connecting the southern fields to Port Sudan.
The south preferred a route that would not pass through the north and proposed a route that passed through Kenya to the Indian Ocean. In addition there was a dispute over building a refinery which the south demanded to be in its region. This demand was rejected by the government in the north and the refinery instead was built in the north. These disputes, all related to control over the countries oil wealth, resulted in a deep crisis and an increasing lack of confidence between the two parties. The central government’s clear intentions to seize full control of the oil violated the Addis Ababa agreement and increased anger and fear in the south which eventually resulted in the eruption of the second civil war in March 1983. At that time the rebel Sudan People’s Liberation Army (SPLA) was founded by the southern army commanders led by John Garang. The eruption of the civil war made it impossible for the foreign companies to continue operating in Sudan as the security situation was deteriorating. The SPLA targeted the oil fields in order to prevent the Sudanese government from exploiting the oil resources. In 1984 the SPLA attacked the oil fields in the south abducting and killing three Chevron workers.
This incident forced the consortium led by Chevron to suspend its operations in Sudan. The consortium led by Total suspended its operations in 1985.
After the overthrow of the Mengistu regime in Ethiopia in 1991, which was a main ally of the SPLA, the SPLA lost considerable ground to the government forces over the following three years. As a result of this the majority of the oil fields once again came under the control of the Sudanese Government and relative security prevailed. This new situation attracted new foreign investments and led to the resumption of the oil exploration and development operations. The oil revenues, especially after 1999, altered the balance of power within Sudan as the Sudanese government gained the financial resources to modernise the army and make it more efficient in fighting the SPLA. This shift in the military balance of power did however not bring the civil war to an end. The SPLA continued to receive support of the United States and its regional allies and continued to attack the Sudanese army and some oil fields.
The civil war only ended officially in January 2005 by the signing of a peace agreement in Nairobi, on the basis of which the south was granted the right to self determination in 2011 after a six year long transitional period. An important element in the agreement was the sharing of oil wealth, which would be divided equally between the two parties.
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