Association of Concerned Africa Scholars (ACAS) Oil Bulletin, December 2001
Oil Development in Sudan
Eric Reeves, Smith College
I. Oil development in Sudan now sustains and exacerbates the longest and most destructive civil conflict in the world. More than two million human beings have perished in the most recent phase of the conflict, which re-ignited in 1983 at least in part because of Chevron’s discovery of commercially significant oil reserves in the late 1970s. Because the discoveries occurred in areas near the 1956 division between northern and southern Sudan, then President Nimieri attempted to re-draw the boundaries in order to place oil reserves in the north. Nimieri’s further reneging on the 1972 Addis Ababa peace agreement, and his attempt to impose shari’a (Islamic law) on the south, also helped trigger the renewal of fighting.
Chevron withdrew from Sudan in 1984 when the southern opposition killed several of its workers, and this essentially ended their role in oil development. It was not until the late 1990s that commercial activities again resumed in serious fashion, with the entry of Canadian, Chinese, and Malaysian oil companies. Over the last five years the consequences of oil development have been devastating, sustaining and exacerbating the conflict in a number of ways.
The most promising oil reserves lie in the south of Sudan. In the eyes of the presently ruling National Islamic Front (which came to power by military coup in 1989, deposing an elected government), this unfortunate fact of geography has dictated that they pursue a relentless policy of scorched-earth warfare to create “security” for the foreign oil companies. Tens of thousands of indigenous people have been killed, more than 200,000 displaced.
These brutally destructive policies have been chronicled by many human rights organizations, by the UN Special Rapporteurs for Sudan, by the staff of humanitarian organizations operating in southern Sudan, and by numerous independent news reporters. Further confirmation was offered by an extensive Canadian assessment mission of late 1999, commissioned by then Foreign Minister Lloyd Axworthy in response to civil society activism and the reports of the UN Special Rapporteurs (of particular significance is the report of Leonardo Franco of October 1999).
Moreover, oil revenues presently stand as the greatest obstacle to a resolution of the conflict. All Sudanese revenues, from all oil projects and concession sales, go directly to the National Islamic Front, unencumbered by any credible mechanism for equitable or productive distribution. Indeed, the regime has boasted openly of its willingness to use revenues for military purposes, and has made good on these boasts. Acknowledged military spending, according to IMF documents, reveals that over the last three years military spending has doubled (oil began to be exported in August 1999, though the regime had clearly been using anticipated oil revenues to fund military purchases, especially from China). Moreover, several dual use facilities (military/commercial) have recently been completed near the capital of Khartoum. These have allowed for a very significant increase in domestic military production, and the regime is now militarily self-sufficient in several categories.
Oil from the major producing consortium in southern Sudan (the Greater Nile Petroleum Operating Company [GNPOC]) also goes directly to a 10,000 barrel a day refinery in the town of El Obeid, which lies (not coincidentally) adjacent to the forwardmost military air base of the regime. From the El Obeid air base, Antonov bombers (actually retrofitted Russian cargo planes) have conducted an ongoing campaign of bombing against civilian and humanitarian targets throughout southern Sudan and other marginalized areas, most notably the Nuba Mountains in southern Kordofan province. These attacks, numbering in the many hundreds over the last few years, are nothing less than state-sponsored, state-conducted terrorism, in that they serve no military purpose other than to terrorize civil society and create further internal displacement (Sudan’s internally displaced population of 4.5 million is the greatest in the world).
The deliberate targeting of UN-sponsored humanitarian relief has also been a hallmark of Khartoum’s conduct of the ” oil war.” So intense was the bombing of humanitarian relief in the summer of 2000 that all efforts to reach the extremely vulnerable populations of southern Sudan were suspended. Attacks on humanitarian targets are presently continuing.
The airstrips built by the foreign oil companies in their concessions are also used for military purposes by the Khartoum regime. The Canadian assessment mission established this as “totally incontrovertible” in its report (January 2000), and a Canadian/British human rights team has very recently (October 16, 2001) issued a highly authoritative report confirming that helicopter gunships continue to use the oil company airstrips for attacks against civilians in the south and other areas in and bordering the oil concessions.
II. The companies making up GNPOC, the only significant producing consortium in Sudan, include Talisman Energy of Canada (25%), Petronas (the state-owned oil company of Malaysia) (30%), and China National Petroleum Corporation (40%). Sudapet, the Sudanese state oil company, has a nominal 5% stake, but the royalty contracts dictate that at present production levels, Khartoum receives approximately 40% of profits after the scheduled capital recovery.
Other companies operating or controlling concessions in southern Sudan include: Lundin Petroleum (a small, recently re-structured Swedish company, that operates with Petronas and OMV of Austria in the most southerly of the concessions); Gulf Oil (Qatar), which operates in the most easterly concession along with China National Petroleum Corporation; and TotalFinaElf (the French oil giant, which controls the largest concession areas in the south). Agip of Italy has signed an agreement with Petronas. The Russian Slavneft has also signed an oil exploration and production agreement with Khartoum.
The response to oil development in Sudan by American civil society has been nothing short of extraordinary. Though advocacy efforts are also underway in Canada and Europe, and growing in strength, it is in the US that a broad and deep coalition of political, human rights, and religious groups has forced Sudan to the top of America’s African foreign policy agenda. Numerous African American political and church organizations have become especially committed in the last year—in part because of the ways in which oil development has helped sustain a vicious trade in human slaves (this has been abetted by Khartoum through its military proxies as part of its war effort). The Congressional Black Caucus is unaminously behind the Sudan Peace Act, as passed by the House of Representatives (422 to 2, June 13, 2001); this bill contains provision for capital market sanctions, i.e., the shares of all foreign companies operating in Sudan would be de-listed from the NYSE and the NASDAQ (US sanctions already prevent any commercial presence by American firms in Sudan). Though the bill is in legislative limbo following the events of September 11, its passage by the House is a landmark in the American response to destructive oil extraction ventures in developing countries. Organized labor (AFL-CIO) also supports this version of the Sudan Peace Act, as does the American Israel Public Affairs Committee.
The American Conference of Catholic Bishops has taken a deep interest in the issue of oil development in Sudan, and they have spoken out vigorously. Conservative and evangelical Christian groups and rights organizations have also made an especially great contribution to forcing the Bush administration to recognize the seriousness of Sudan, and the human suffering and destruction so obviously related to oil development. The Committee on Conscience of the US Holocaust Musem has designated Sudan as “at risk of genocide” and their exhibit in the Museum, as well as their brochure (and a blistering oped in the Washington Post) highlight oil development in Sudan. They’ve been extremely helpful in the campaign.
Most tangibly, a divestment campaign against Talisman Energy, which is listed on the NYSE and Toronto Exchange, (led, for example, by the American Anti-Slavery Group [Boston], which helped to start the divestment campaign, the Presbyterian Church/USA and just recently the Episcopalians) has brought the largest independent oil and gas producer in Canada to the brink of a forced exit from Sudan. The Canadian Anglican and Lutheran Churches are committed to divestment. The Ontario Teachers, whose Pension plan is one of the largest shareholders of Talisman, have voted to divest. There is a great deal of advocacy effort now coming on line in Europe. Some observers have described this divestment campaign as the most successful since those of apartheid-era South Africa.
Amnesty International has continued to press hard on oil development issues, though they haven’t taken an advocacy position on divestment/oil company withdrawal. Human Rights Watch, which has been outspoken in their criticism of oil development before, is about to issue a major study of oil development in Sudan, and it will become the definitive (300-page) document on the subject. The Casey Institute in Washington, DC has been vigorously committed to the Sudan campaign. Many individual church and Christian organizations have also committed resources and political clout (e.g., Safe Harbor in California).
Key resources:
Amnesty International reports: “Sudan—The Human Price of Oil,” May 3, 2000
[http://web.amnesty.org/ai.nsf/Index/AFR540042000?OpenDocument&of=COUNTRIESSUDAN]
Christian Aid (UK) report: “The Scorched Earth: Oil and War in Sudan,” March 2 001 (Christian Aid has almost 30 years experience working in both north and south Sudan)
[http://www.christian-aid.org.uk/indepth/0103suda/sudanoil.htm]
Report by Georgette Gagnon (Canada) and John Ryle (UK): “Report of an Investigation into Oil Development, Conflict and Displacement in Western Upper Nile, Sudan,” October 16, 2001 (Gagnon was a member of the original Canadian assessment mission; Ryle is a Sudan expert, with specialized knowledge of southern Sudanese ethnography)
[http://www.ideationconferences.com/sudanreport2001/resourcepage.htm]
Reports of the UN Special Rapporteurs for Sudan can be found at:
[http://www.unhchr.ch/SearchFormtest1.nsf/0a17df071aa8104ac125662e00356cad?CreateDocument