Sudanese Oil Deal a Shaky Step Toward Peace

By Kremena Krumova, Epoch Times
May 16, 2013 Updated: May 16, 2013

Joy over the official resumption of oil trade between Sudan and South Sudan on May 10 may not last long. 

The latest deal marked a major step toward pacifying edged relations between the two neighbors. South Sudan seceded in July 2011, and took 75 percent of Sudan’s oil with it. 

After a 15-month halt, oil flow resumed between the largest oil fields in the Upper Nile region of South Sudan and Sudan. But only a day later, tensions between the two African nations erupted again. 

On May 11, the government in Khartoum, Sudan, accused its counterpart in Juba, South Sudan, of supporting rebels from the Sudan Revolutionary Front (SRF). The rebels attacked the city of Um Rawaba in North Kordofan State, Sudan, about two weeks ago. 

Khartoum warned this could obstruct the recent oil and security agreement.

The two nations signed the deal after a week of talks in Ethiopia’s capital of Addis Ababa in March 2012. Juba agreed to restore the production of crude oil, while Khartoum promised to transport the oil via its pipelines to Port Sudan on the Red Sea coast as of May 10, 2013. 

Although the official day of oil trade resumption was May 10, the first oil delivery arrived in Khartoum on April 13. 

In 2010, before South Sudan’s secession, the nation was sub-Saharan Africa’s third largest oil producer. It turned out about 490,000 barrels per day (b/d), according to the BP Statistical Review of World Energy for 2010. At the beginning of 2010, Sudan’s oil reserves were 6.7 billion barrels, 80 percent of which were in the south.

In January 2012, South Sudan closed oil production because of “exorbitant transit fees and tariffs and in protest of continued theft by Sudanese authorities of its oil,” as stated by the government in Juba.

‘A Sense of Relief’

The new deal brought with it new hopes on both sides of the border. 

“There is a sense of relief in both countries,” said Luka Biong Deng, South Sudanese expatriate and a fellow at Harvard Kennedy School. “People are fed up with war, and now they are happy that at least the oil is going to flow.”

With the resumption of oil exports, the initial production is expected to be 150,000 to 200,000 barrels per day (b/d), and to rise to 250,000 to 300,000 b/d in the coming months. 

Production of 250,000 b/d would bring South Sudan more than $9 billion a year, while Sudan would earn more than $2 billion a year from transit fees for the use of its pipeline infrastructure and a $3.08 billion compensation package from the south, according to Foreign Policy magazine. 

Continued Mistrust

But the mistrust between Sudan and South Sudan remains high after 20 years of civil war; fighting continues in Darfur and in the border areas of Abyei, Blue Nile, and South Kordofan. 

Deng said there is a concern in the south that Khartoum may not keep up its end of the deal.

“The government in Khartoum is so unpredictable. Something may happen and Khartoum may decide to stop the oil flow,” said Deng. 

But the decision may also come from Juba. 

Last week, South Sudanese President Salva Kiir Mayardit accused Khartoum of orchestrating the assassination of Kuol Deng Kuol, paramount chief of the Dinka Ngok tribe. Kuol was killed in the disputed region of Abyei during an attack on a United Nations convoy on May 4.

John Akec, vice chancellor of the University of Northern Bahr El Ghazal in South Sudan, wrote in an email to The Epoch Times, “These issues will continue to be thorns in the flesh of the two governments, and both must exercise mature politics and wisdom to move forward until these issues are tackled one after another.”

As South Sudan relies on oil for 98 percent of its annual budget, it tries to find alternatives to export its oil without relying on Sudan’s pipelines. 

Last September, South Sudan signed an agreement with Ethiopia and Djibouti to construct a pipeline through the two countries. South Sudan also expects to sign a similar deal with Kenya, which would allow the construction of a pipeline to the Kenyan port of Lamu starting in October.