Oil Pipeline to the Indian Ocean is as important as Independence itself

By: Justin Ambago Ramba, MD.

JULY 10/2010, SSN; Historically, the causes of the irresolvable north/south disputes in the Sudan have been attributed to the religious, linguistic, cultural and racial differences that stand in sharp contrast between the Muslim and Arab peoples of the north and the black African mostly Christians and animists of the south. However, as of now, in addition to the previous reasons, ideological and economical reasons have taken the fore front in the crisis.

It could be rightly assumed that the discovery of the huge Oil reserves in the country, where more than 85 % of it lie inside the southern territories, this black gold is right now in the centre of what otherwise is a five-decade old human struggle for liberty, justice, equality and human dignity.

The fiercest part of the north/south Sudan’s war was indeed funded by revenues that came from the Oil fields which belong to south Sudan, but even today more than five years after the peace agreement between the two sides, Khartoum remains to have a heavy military presence around those oil fields, a main reason for the north’s reluctance to accept any border demarcations between the two parts.

If it can be said that indeed the Oil Bonanza made the last part of the war worse and bloodier than ever, it can also no doubt be acknowledged that it did pay for the peace negotiations that eventually led to the present peace truce. And according to the protocol on wealth sharing in the Comprehensive peace Agreement (CPA), the revenues from the Oil produced in the southern fields were to be shared in equal halves by the former foes. These billions of oil dollars were meant to bring about the much talked-about political transformation in the whole Sudan. 

It was thought that by the time the south goes for the referendum in 2011, Ramciel and not Juba would have come all sky-crappers. The same beautiful dreams were also sold to our compatriots in the equally war torn Nuba Mountains, the southern Blue Nile and Abyei.

While we are now left with six months left for the end of the agreement, not a single sky-crapper can be seen anywhere. On the contrary, we are witnessing the torching of the few grass-thatched huts erected by the returnee populations in Abyei, Lakes state, Upper Nile and Jonglei states.  

However, Sudan’s dependency on the Oil money following the Oil boom is so huge that the figures for northern Sudan is said to be 68%, while the nascent government in the south is up at 98%. What this means is that in the event the south’s secession north is likely to lose access 2/3 of its developmental projects budget that is financed by the oil money coming from the south’s oil fields.

Whereas for south Sudan, independence in January means a declaration of one of the  poorest countries in the world with a total dependency on oil money, an industry that it right  now heads but  never controls. The lack of probity and accountability has led the Southern Sudan government to doubt the Arab-led Khartoum government, implying a strong possibility of the North keeping a lion’s share of revenue from resources from the South. For the south to have a true control over its economy it must first of all secede from the north.

Although Oil is now difficult to be fully controlled by the south, yet arrangements could be put in place where the current day Oil industry has to be managed by a third party purely on professional basis until such a time that an alternative pipeline is constructed through East Africa to the Indian ocean.

What was attributed in the Sudan Tribune to Sudan’s petroleum minister who himself is a leading Southern Sudan ruling party official, that he  described the proposed pipeline to take Oil from Southern Sudan to world markets through Kenya as, “uneconomical,” to me remains a personal opinion. He is entitled to his views, as the rest of us are entitled to ours.

However, given the huge lack of trust between the north and the south, issues that can free us from the grips of the imperialistic Khartoum will always remain priceless and can never be labelled uneconomic in anyway. We have seen many projects that came into being solely for political reasons, than economical once.

Unfortunately, what the Oil minister is bringing up as a smart economic argument is just one of those hundreds of reasons which Khartoum would very much love to use in blocking the secession vote in the south.

I don’t know how our minister would economically asses the five decades war in south Sudan. Economically, the war destroyed no less than 3 million lives and effectively arrested development at the Stone Age. So was it uneconomical to fight for liberation? If the answer is NO, then the point to stress here is that pipelines to transport south Sudan’s Oil through Kenya is a continuum of the liberation struggle against the oppressors of the north and their allies in the Middle East and beyond.

Dr. Lual’s statement and I quote: "If you are forced, economy does not make sense, but under peaceful conditions we will continue to use existing facilities," he further said referring to the use existing pipeline transporting oil to Port Sudan in case of southern Sudan independence.

This particular statement looks as if the minister’s perception is that the relationship between the south and the north has not yet reached that worrying stage. It is a dangerous impression as it will delay the south from starting work on the ‘freedom’ pipeline via Kenya. The more the north knows that the south is reluctant to build the Kenyan pipeline, the more they will want to force the south into making consensus to a level of diluting the region’s quest for an effective independence.

No one is naive of the fact that the SPLM leadership has dragged the south over the last five years into the current unenviable situation. An alternative source of revenue should have been established. But the big boys had no time to implement anything, until they were reminded by the sudden drop in the Oil prices that the blessing they walked into is indeed a short lived one. 

It is for this reason and others as well, that we stress the importance of diversifying the sources of revenues. Unless we seriously go back to agricultural projects, the possibilities are that should the oil fields go suddenly dry, or in an event of a return to civil war (God forbid) over Abyei or other borders issues on top of which would be the fate of the Oil fields itself, then we stand to lose everything for GoSS would obviously find it impossible to pay all ghost names that inflate its working force.

Wealth sharing ends were the CPA ends. In the post-CPA period we can only talk of renting the North’s pipelines, but we cannot afford to continue with the wealth sharing arrangements that dictate on us giving 50% of our Oil to the North. This must end with the CPA.

Of importance is that the ownership of the Oil fields must be made clear and any Oil existing within what would be known as the territory of south Sudan would eventually  become the property of South Sudan – and there after we get to business the way the Jallaba says, “Eat as brothers and account as traders”

Hopefully after the January 2011 referendum there would finally be no more United Sudan, but  two separate countries  - south Sudan and north Sudan, where ownership of assets are expected to be divided. As for the Oil – 85% which comes from territories of the south thereafter would become exclusively the property of the newly independent state of South Sudan. At this stage the North must be made to understand that Oil can never be treated like the Nile Water. South Sudan should only hire the pipelines that pass through the territory of North Sudan down to the port.

Should the north demand Oil, then they can buy as the Oil is in the market, but may be at a lower price in consideration to other mutual arrangements that may become necessary for mutual benefits and protected by sovereign law. 

Whether we like it or not, the fact of the matter is that south Sudan only has limited oil reserves. The little we have should be exploited wisely and the money invested in the development of our human resources which would become in the long run the major earner of our national revenues. It's the developed human being who can live a better life far from the miseries of poverty which up to date continue to shadow underdevelopment.

One of the problems with Oil resources is that they wind up reducing the initiative for the oil-rich nation to develop its human resources for other exports. Addressing this requires great wisdom on the part of the government.

Another issue is the unpredictable fluctuations in the price of Oil, thus budgets built on Oil dependency are not reliable.  A large company with good experience and vast credibility in the Oil Industry should preferably handle the marketing of the Oil.  It could negotiate a price based on the average of several years’ market prices and smooth out the income fluctuations for south Sudan. This could guarantee the proper management the Oil industry, and at the same time prevent any undue interruptions in the projected budgets. And because we are a relatively a small producer, we do not have the ability to do that all on our own.

As every project warrants a feasibility study, I believe that the pipeline to the Indian Ocean coast must remain a viable option for both political and economic reasons. And although I am not usually keen on advising the north, but I think they better reduce their dependence on Oil while I expect the south to do just the same.

Let us hope that everything goes smoothly until a peaceful divorce is seen through between the two sides. Going back to war means blowing up all the Oil fields, and of course without Oil, though the war would be a short one, yet the aftermath is set to bring poverty and human misery on both sides.

The author: Dr. Justin Ambago Ramba, MD. Is a concerned south Sudanese citizen  currently living in the United Kingdom. He can be reached at  justinramba@doctors.net.uk or justinramba@aol.co.uk

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