How oil politics split nations

18 January 2011
Nnimmo Bassey
Executive Director
Environment Right Action (ERA)

As Sudanese vote this week on staying as one nation or becoming two, my mind goes back to when civil war broke out in Nigeria in 1967. I recall that when Biafra was announced, I leapt in celebration at the novelty of suddenly being a citizen of a new country under a new flag and with a bearded man at the head of state. What my young mind could not fathom, and did not question, were the reasons for the emergence of the new nation. What were the announced reasons and what were the unspoken ones?

Before we could settle to savour the change expected from the split, things took a different turn. The war drums sounded, and bullets began to fly. Streams of refugees flooded through our village and soon enough, we were on the move. I still recall seeing starving kids, rotting corpses by the roadside, and I can hear the screams of young ladies who were captured and forcibly married by rampaging troops.

We see the great mobilisations by the peoples of Southern Sudan for a split and when the result of the referendum is announced, we can bet that the result is like a dream long foretold.

There are many reasons why the South should be eager to drift away. Indices of development from the country are severely skewed against the region. Reports have it that over 80 per cent of the inhabitants of Southern Sudan have no sanitation facilities.

While almost 70 per cent of the people living in Khartoum, River Nile, and Gezira states have access to pipe borne water, the people in the south depend on boreholes and rudimentary water wells. They and those in the Darfur area depend largely on food aid for survival on account of the dislocation of the agricultural sector by entrenched violent conflict.

Certainly, all will agree that oil is a major factor in the political fortunes of Nigeria. We may squabble and bicker under the cover of ethnic or regional differences, but beneath the surface, the struggle is over who controls the massive oil and gas resources and revenues of the land. The struggle for power at the centre was set the moment a unitary system of government was decreed in 1966 and has since coloured the sort of federal system that the nation runs on.

Oil is a principal factor in the current political situation in Sudan. Exploration activities started in the 1960s by AGIP, the Italian oil company, which found natural gas in the Red Sea. The American oil giant, Chevron, followed suit but never revealed what they found, according to reports.

Like Nigeria, like Sudan

As time went on, a number of Chinese and Asian companies jumped in and finally oil was produced from the Muglad Oil Basin, Blocks 2 and 4. Sudan is divided into 17 oil concession blocks with SUDAPET, the government owned company, working in joint partnership with the various Asian and European oil companies.

As aptly captured by a Sudanese academic in a recent Oilwatch Africa meeting, “Sudanese oil has been developed against the background of war, international sanctions, and political isolation. It has been developed at a time of imposing demand by emerging economies like India and China and a time of unprecedented soaring prices of both food and oil and the controversial use of agricultural crops as a source of bio-energy.”

Quite like Nigeria, oil produces over 75 per cent of the foreign exchange earnings of Sudan. Other production sectors have equally been almost completely neglected. Before oil, over 50 per cent of Sudan’s revenues came from the agriculture sector, contributed 95 per cent of the export earnings, and employed a high percentage of the total labour force in the country.

With oil as a major economic factor, and seeing that the bulk comes from the South, developments nevertheless eluded the region. An example can be seen in the first refinery which was sited about 70 Km north of Khartoum. Crude export pipelines runs northward and amount to about 5326 km in length.

The reality is that with the available infrastructure, the South cannot export its oil except through the North. In addition, as the date of possible separation drew nearer, new oil blocks that transverse northern and southern areas were being allocated.

Oil companies operating in Sudan are exempted from paying taxes. The contracts were mostly negotiated when the price of an oil barrel of oil was less than 20 US dollars. Surely, the companies operating here could not hope for a better space for reckless exploitation and incredibly high profit margins. Added to this is the fact that the regulatory regime is largely non-existent and even the conduct of environmental impact assessments are selective.

With Sudan having about five billion barrels of oil in reserves and currently exporting billions of dollars worth of oil per year, it must be painful for Khartoum to let the oil rich South go. About 80 per cent of Sudan’s oil exports come from the southern states. Only 50 per cent of revenue accruing from oil goes to the South, a factor that undoubtedly stokes the embers of discontent in the area.

As the peoples of Sudan vote for the emergence of a new Southern nation, dreams of the desperately poor and those traumatised by war and cruelties will run high. Children who never experienced peaceful environments will be marvelling at great possibilities. Oil has certainly greased the engines of exploitation, oppression and war in Sudan. It is oiling the machines of separation today. What will it lubricate next?

These are questions we must mull over, but a bigger question is over the implication of continued fragmentation for Africa as a whole. At a time when the continent should be coming together and erasing the arbitrary boundary lines drawn by colonialist adventurers, we continue to fragment. Certainly, this cannot be the only way to overcome poor and parasitic governance.