Why oil is critical in preventing a return to war in Sudan

While there are many outstanding issues in the implementation of the 2005 Sudanese peace deal, the issue of sharing oil revenue stands out as potentially decisive, and could lead to a return to war.

New evidence that shows production figures for 2009 don’t add up has emerged.

The figures, recently published by the China National Petroleum Corporation (CNPC) — the main oil company operating in the country — for the blocks it operates in Sudan’s Upper Nile State, are 12 per cent higher than those published by the Sudanese government.

The difference — 12 million barrels — is significant. The oil, worth $370 million, is enough to power a city in the US the size of San Francisco for an entire year.

When the North-South conflict reignited in 1983, there were already significant amounts of oil deposits in the South, although it was not until 1999 that the commodity was first exported.

The revenues helped the government to fan the conflict.

Indeed, a former finance minister has been quoted as saying that more than 70 per cent of the government’s share of oil profits was spent on “defence.”

The Southern rebels announced that oil infrastructure and personnel would be regarded as legitimate military targets, and the focus of the conflict moved to the oilfields, with hundreds of thousands of civilians being killed or forcibly displaced from their homes by forces allied to the government.

So, oil fuelled the conflict, yet, crucially, helped end it too.

Recognising the importance of sharing the revenues as per the Comprehensive Peace Agreement, signed five years ago, is key to an enduring peace.

The agreement stated that oil revenues would be shared equally between the federal government in Khartoum and the Southern government in Juba.

Since the CPA, Southern Sudan has received more than $7 billion in oil revenues, but the hoped-for development has yet to materialise.

Indeed, the region lays claim to being the poorest place in the world, with 90 per cent of its people living on less than a dollar a day,

Many blame the lack of development in the region on corruption and challenges with administering aid money.

But whatever the reason, the oil has fuelled resentment and threatens the peace process.