New Sudan oil deal must ensure transparency

A new oil-sharing deal between Sudan's north and south must ensure transparency, according to Global Witness group. The accord between the two sides stipulates oil revenues be shared roughly 50:50

A new oil-sharing deal between Sudan's north and soon-to-be independent south must ensure transparency and independent monitoring to avoid mistrust that could fuel future conflict, resource campaign group Global Witness said on Thursday.
Southerners will begin to vote on independence on 9 January and are expected to choose secession under a 2005 north-south peace deal that ended Africa's longest civil war.
The accord between the two sides shares oil revenues roughly 50:50. Around three-quarters of Sudan's oil comes from wells in the south but the infrastructure is in the north so some form of sharing of the 500,000 barrels per day of production will be necessary post secession.
In 2010, total revenues were $4.5 billion.
Global Witness said any new deal must learn from the past and stipulate transparency with regular publishing of all figures, independent monitors, audits, and a dispute resolution mechanism to avoid mistrust.
"A new oil deal between north and south is critical to preventing a return to full-scale war," it said in a report on Thursday.
"Global Witness is calling for any new oil deal to make compliance with the deal itself easily verifiable, be regularly validated by an independent monitor, and incorporate a dispute resolution mechanism."
In 2009, the group discovered that the dominant oil firm in Sudan, China's CNPC, was reporting different oil production figures to Sudan's energy ministry, prompting an unprecedented Khartoum-sponsored oil transparency day last year.
Promises made then by the energy ministry included a full independent audit of the oil sector since 2005, which has been approved and published daily output figures, has stopped.
"The last time that the Sudanese government published detailed figures on the oil revenue sharing was June 2009. Since then, there has been a substantial decrease in the amount of information provided to the public," the group said.
"As such, the total information available today represents an overall step backwards in transparency terms: far less data is being published by the Sudanese government now than it was in 2008 and the first half of 2009, which even then was insufficient to be able to verify the oil revenue sharing."
It also said the explanations given by CNPC and the ministry for the discrepancies in oil production from blocks in the south had been discredited by industry experts and no data supporting the claims had ever been produced as promised.
Sudan's government had said CNPC reported oil production including water and was measured at a different pressure and temperature to their figures.
"The explanations provided by both the Sudanese government and CNPC for why their oil production figures do not match each other do not stand up to scrutiny -- the government's explanations have been discredited by respected oil experts," Global Witness said.
"In addition, data that could have been provided by the Sudanese government or the oil companies to back up their explanations has not been forthcoming," it added.
Sudan's opaque energy sector has been dominated by Chinese, Malaysian and Indian firms after Western companies withdrew because of U.S. trade sanctions imposed in 1997 and allegations of rights abuses during the north-south civil war.