Oil has played a major role in ending Sudan's civil war.
Feb. 21 issue - The peace agreement between northern and southern Sudan recently brought one of Africa's most protracted civil wars to an end. For years the mostly Muslim Arabs in the north, who run the government, battled largely Christian (and animist) African rebels in the south, who were angling for more power, money and autonomy. Mounting international pressure on the government was certainly a big reason the warring sides were finally able to reach an accord—one that gives the south the opportunity to hold a referendum on whether to secede in seven years. But another, less-known catalyst for peace lay under the combatant's feet—oil.
Sudan began exporting large quantities of oil in the late 1990s, and has since become a major player in the global industry. The country's proven reserves have doubled over the last three years (to 563 million barrels)—and they're sure to rise again, say experts, because exploration efforts have barely begun. Oil sales now bring the impoverished African nation about $5 billion annually, about one third of the national budget. China's National Petroleum Co. owns about 40 percent of a consortium that controls Sudan's oil production. According to a source familiar with Sudan's long conflict, it is no accident that the government and its longtime enemy, the Southern People's Liberation Army (SPLA), began serious peace talks about three years ago, when the oil bounty was becoming apparent. Nor is it a surprise that negotiators for the two sides made an unexpected push to finish the deal late last year—when oil prices hovered near record highs of close to $50 a barrel. "Oil has been the most important factor in the 'push for peace' in the north-south deal," says the source, an African diplomat long involved in the peace negotiations.
In the deal signed on Jan. 9, the two sides agreed to form a joint government and to split oil revenues evenly. The accord gives the south a 30 percent share of seats in Parliament, with 70 percent of those going to the SPLA and 30 percent going to other rebel groups to ensure political power sharing within the region. Government hard-liners were, for a time, very reluctant to put oil revenues on the table during peace talks. For one thing, oil sales largely financed the government's war effort—including large arms purchases from China, which is Sudan's most important strategic ally.
But most of Sudan's producing fields are in the southern part of the country, and they'd been subject to steady SPLA attacks. Two fifths of the country's reserves are also in rebel-controlled territory. That raised the risk factor for the country's oil industry even as rising prices, along with rising production numbers, were becoming an economic bonanza. What's more, partly because of the crisis in Darfur, the Sudanese government came under mounting diplomatic pressure in 2004 to end the war, including a U.N. threat to impose economic sanctions on the government. China opposed the sanctions idea. But Sudan accounts for 10 percent of the Asian giant's oil imports, and according to Omar Bashir Manis, Sudan's deputy permanent representative to the United Nations, "China has always been encouraging the government to continue the peace talks." According to Bashir, "Oil was a factor and a negotiating tool. We knew there would be a great deal more to share in the future."
Southern Sudan stands to benefit enormously. The region has no roads, no infrastructure, no water, no food. That will soon change: the region is entitled to receive $1.1 billion in oil revenues this year, and will likely be getting lots more in the years ahead. "People keep talking about reconstruction," says Lual Acuek Deng, economic adviser for the newly created SPLM Economic Commission, which will distribute oil revenues in the region. "But there is nothing to reconstruct." For starters, the region's leadership hopes to build 10,000 kilometers of roads within the next six years. Deng says building things is the best way to use the funds. "We don't want to end up like Nigeria, with money flowing into individual pockets rather than back into the country." The new government would do well to remember his words.
© 2005 Newsweek, Inc.
- Database Search
- Unpaid Debt A comprehensive overview of the role of the Lundin Consortium in the oil war. ECOS calls upon the Swedish, Austrian and Malaysian governments to investigate whether, as a matter of international law, Lundin, OMV and Petronas 'were complicit in the commission of war crimes and crimes against humanity by others during the period 1997-2003.’ In response, the Swedish Public Prosecutor for International crimes opened a criminal investigation into ‘links between Sweden and the reported crimes’.
- In Depth For more specific information about the Lundin court case please visit the Unpaid Debt dossier.
