Sudan becomes an oil exporter, despite US opposition

Empowering Weak & Oppressed

M.A. Shaikh

Jumada' al-Akhirah 06, 1420 1999-09-16

Occupied Arab World

by M.A. Shaikh (Occupied Arab World, Crescent International Vol. 28, No. 14, Jumada' al-Akhirah, 1420)

Sudan officially became an oil exporting country on August 30, when it shipped its first barrels of high-quality crude oil from the Bashair oil terminal on the Red Sea. The oil was from the Hegleig oilfield in western Kardofan, and had been transferred to the Bashair terminal through a 1,610km pipeline.

Dr Awad Ahmed el-Jazz, the Sudanese energy minister, said at a press conference in Paris on September 7 that by exporting oil for the first time, Sudan had overcome one of the biggest obstacles to its economic development. He told the conference that Sudan is now producing 150,000 barrels per day (bpd), and intends to increase this soon, while domestic consumption varies from 60,000 to 65,000 barrels per day. Sudan is not only self-sufficient in oil now, but also in a position to earn valuable foreign currency, and to establish useful economic ties with foreign investors, he said.

El-Jazz - who was in Paris to discuss plans by a French oil company to develop its oilfield in Sudan - said the crude, known as Nile Brent, was top quality and was cheap to produce. The total cost of producing and exporting the Hegleig oil was $2.3 billion, including the cost of installations on the field itself, the construction of the pipeline, and the construction of oil-exporting facilities at the port of Bashair.

For a country in economic crisis due to a foreign-backed insurgency and economic sanctions imposed for political reasons, this is a major breakthrough. Sudan now has the potential to access the resources needed to fund the development of its vast agricultural and mineral resources. Another good sign is that this singularly good achievement has been made under an Islamically-oriented administration and not under a secular regime which would have used it to buy influence and to get rich rather than for development purposes.

The story of the production and export of Sudan’s oil is truly remarkable, given the hurdles put in its way by the US, Arab oil-producers who wanted Sudan’s oil to stay in the ground for strategic reasons, and the southern insurgents egged on by their foreign backers. Oil exploration began as early as 1950s, but western companies showed no enthusiasm for developing the fields they had leased. When exploration was stepped up, in the 1970s, politics intruded.

President Ja’affar Numeiri introduced shari’ah laws in 1983, and the Sudan People’s Liberation Army (SPLA), encouraged by western countries opposed to Islam, attacked the Bentieu oil field in the south. The Chevron oil company, the US owner of the field, immediately pulled out, although the attack was an isolated one. America’s hostility to Islam was clearly the crucial issue, rather than security. The company also held concessions in areas where there was no insurgency ( including the now-thriving Hegleig field ( but it chose only to develop the southern Bentieu field.

But Chevron held on to its concessions, although it had pulled out, until 1991, when the Bashir regime, after only two years in power, gave it the choice of beginning exploration immediately or selling its concession. It elected to sell its concession to a Sudanese businessman, who in turn sold it to the government, and after a short time modest amounts of oil began to be produced at Abu Ragab, Western Kordofan, where a small refinery was also built.

The first giant step forward, however, was taken in 1995, when an international consortium was established to take up the task of producing oil in large quantities. The Greater Nile Petroleum Operating Company (GNPOC) consists of the China National Petroleum Corporation (CNPC); the Malaysian State Oil Company, Petronas; Talisman, a Canadian oil Company; and the Sudanese oil company Sudapet. The CNPC holds 40 percent of the shares, Petronas 30 percent, Talisman 25 percent and Sudapet five percent. The government has also signed production-sharing agreements with two other companies, the PNC and the Gulf Petroleum Company.

The noticeable absence of American and European oil companies is not due to Khartoum’s antipathy to them, but to their government’s policy of isolating Sudan in order to help John Garang’s SPLA to achieve a victory that would guarantee the secession of the south. When, for instance, the US Occidental oil company showed interest in joining the GNPOC as a founding member, the Sudanese government made it an excellent offer. But after returning to Washington for consultation with the US government, Occidental’s officials decided against joining, even though they had requested it in the first place.

But Khartoum does not feel bitter toward American oil companies for making themselves scarce, and does not miss them. El-Jazz said at his September 7 press conference in Paris that US oil companies are free to apply for fresh concessions. The energy minister - who is well-satisfied with the almost miraculous work carried out by the GNPOC - resisted the temptation to add that they had not been needed in any case, and might have been obstructive if they had been members of the consortium.

The GNPOC succeeded in building the longest pipeline in Africa, and all the other infrastructures and installations, in record time. The pipeline, with a capacity of 250,000 bpd, was completed in eleven months, instead of the 36 months that had been expected. And work is also proceeding apace on three other oil fields that are expected to start producing soon. New refineries are also being built.

All this has been achieved despite the war in Sudan’s south, as well as cross-border attacks by other Sudanese guerrillas based in Ethiopia and Eritrea, armed and trained with US money. But Sudanese opposition forces were asked to leave their bases in these countries after a border dispute between them in May 1998 developed into full-scale war. Uganda, however, is still hostile to Sudan and continues to back the SPLA.

The Americans, meanwhile, have intensified their hostility towards Khartoum, accusing it of genocide and of trading in slaves. They have also stepped up their pressure on other countries not to deal with Sudan, accusing Poland, for instance, of selling arms to Yemen which were then diverted to Sudan. Washington has also appointed a special envoy for Sudan to co-ordinate its strategy against Khartoum, and will undoubtedly maintain its campaign until a subservient regime is installed there.

The stakes are high. A regime committed to Islamic values and with access to petro-dollars can turn Sudan into a prosperous country able and willing to advance the cause of Islam worldwide. The country has vast agricultural and mineral resources, is blessed with two large rivers, the Blue Nile and the White Nile, and is Africa’s biggest country. But if the resources received from oil-exports are squandered or mis-used, Sudan can become another Nigeria - a huge country awash with petro-dollars which do nothing for the country’s people, and with a massive debt to boot which makes it totally beholden to the west’s international economic bodies.

Muslimedia: September 16-30, 1999

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