x Abu Dhabi, UAESaturday 20 January 2018

Conflict threatens Sudan's oil Industry

The recent killings are casting a cloud over the country's future as a rising African oil star.

Coffins containing the bodies of three kidnapped Chinese oil workers arrive at the airport in Khartoum.
Coffins containing the bodies of three kidnapped Chinese oil workers arrive at the airport in Khartoum.

Recent killings in Sudan's oil-rich South Kordofan and Unity provinces are casting a cloud over the country's future as a rising African oil star. On Saturday, Sudanese armed forces recovered the body of a Chinese oil worker who had been kidnapped with eight colleagues at gunpoint in South Kordofan nearly two weeks earlier. The Sudanese authorities also found a final survivor from the group on Saturday, after recovering four bodies last week. The remaining three kidnap victims escaped their captors on Wednesday.

The nine were abducted while working for Greater Nile Petroleum, a consortium of Chinese, Malaysian, Indian and Sudanese state oil companies led by China National Petroleum. In a separate incident on Wednesday, three Sudanese employees of the Yemeni oil company HTC Yemen Sudan were killed and two of their Yemeni co-workers kidnapped during an ambush in Unity province.. The abduction of the Chinese workers was the third such incident in South Kordofan this year.

As with the two earlier kidnappings in the province, Sudan's government blamed the Justice and Equality Movement, a Darfur rebel group violently opposed to Beijing's role as a key arms supplier to Khartoum. However, the group has denied involvement, while media and state officials have implicated disaffected Arab tribesmen in both recent attacks on foreign oil company employees. Whoever was behind the killings, it is nonetheless becoming clear that an uneasy truce between several factions in Sudan's oil-producing heartland is near breaking point, leaving foreign oil companies and their employees vulnerable in an increasingly unstable environment. That truce has mostly held for the past three years, since the signing of the Comprehensive Peace Agreement (CPA) between Khartoum and the southern Sudanese rebel group Sudan People's Liberation Army (SPLA). But the growing discontent of the region's settled African Nuba and nomadic Arab tribes over the peace agreement's failure to bring them any tangible benefits, together with spillover from the conflict in neighbouring Darfur, is rapidly destabilising the region.

"A number of key events have the potential to trigger conflicts," Sara Pantuliano, a former Sudan peace process delegate, now a research fellow with the think-tank Humanitarian Policy Group, wrote in August in a Social Science Research Council blog, Making Sense of Darfur. "The dangers of renewed violent conflict and humanitarian crisis in Kordofan have been evident ever since the signing of the CPA," wrote Alex de Waal, the programme director of the New York-based research group. "Rather than socio-economic integration and political reconciliation, lubricated by development efforts and a peace dividend, South Kordofan is the locus of an armed standoff with many fearing a return to war."

The Small Arms Survey, a Geneva-based independent research project, also warned in August that South Kordofan could be the next flashpoint for armed militancy in Sudan. The group cited a recent outbreak of fighting in Abyei, the South Kordofan city that serves as a logistics centre for regional oil and gas activity. "Growing ethnic insecurity in the region has the potential to deteriorate significantly over the coming months and needs urgent attention to prevent it from spiralling out of control," it said.

Sudan pumps about 500,000 barrels per day of crude - nearly as much as Egypt - mostly from oil fields in the provinces of South Kordofan and Unity. That makes the country sub-Saharan Africa's third largest oil producer, behind Nigeria and Angola. Even so, the increase in oil production in Sudan has proceeded far more slowly than the country's government expected or would have liked. Development has been hampered both by Sudan's chronic political instability, at times erupting into war, and by strident international campaigns mounted by North American and European church and humanitarian organisations against foreign oil companies operating in the African country.

Alleging oil company collusion with Khartoum's use of oil revenues to finance its earlier war against the SPLA, which seeks autonomy for southern Sudan, these groups succeeded in hounding Talisman Energy, a Canadian oil and gas company, from Sudan. In 2003, the company sold its 25 per cent stake in Greater Nile to India's Oil and Natural Gas. Talisman denied any role in aiding the Sudanese military and said the deal was spurred by concern over its lagging share price.

On Tuesday, a Sudan Tribune report provoked anti-foreign worker online responses to the deaths of Chinese oil workers. "Who cares about aliens who are after resources only?" wrote one respondent. "I wish to hear another killing of more crazy aliens." That wish was nearly granted the next day, only the new victims were the Sudanese workers at HTC Yemen Sudan. The fate of their abducted Yemeni colleagues remains unknown.