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Posted by on Nov 30, 2011 in Economy, Energy, International | 1 comment

South Sudan Offers Khartoum “Package” Over Oil Shipments (Guest Voice)

South Sudan offers Khartoum “package” over oil shipments
by John C. K. Daly

Call it a “package,” though a more accurate word might be “bribe.”

South Sudan’s government has offered Sudanese authorities in Khartoum a “package” to break the rising tension-filled gridlock over South Sudan using its northern neighbour’s pipeline network to ship out its oil exports.

Sudan People’s Liberation Movement (SPLM) Secretary General Pagan Amum Okiech announced in Juba that the “package” is part of the proposal they plan to present to the African Union (AU) High Level Implementation Panel (AUHIP) on Sudan, chaired by former South African president, Thabo Mbeki.

Amum, head of the South Sudan negotiating team on post-independence negotiations, reiterated Juba’s commitment to reporters to strike a deal with Khartoum on all outstanding issues, including the disputed Abyei region, border demarcation, debt, oil transit fees and border trade.

Amum said, “The SPLM and the government of South Sudan have decided to offer financial transitional assistance to the north as a way of resolving the obstacles on oil transportation. This decision is contained in a proposal to be submitted to the AU implementation panel.”

Like Siamese twins, Sudan and South Sudan need each other if their future prosperity is to be ensured.

Why?

While the former Sudanese unitary state’s daily oil output is now approximately 500,000 barrels per day (bpd), 75 percent of the country’s oil production facilities now lie under South Sudan’s territory, but the transit oil export pipelines remain under Khartoum’s control.

The 2005 Comprehensive Peace Agreement (CPA) stated that northern and southern Sudan would equally split the revenue from oil exports, but the CPA has proven difficult to implement, as the pipeline network to transit South Sudan’s oil to Sudan’s Indian Ocean coastline run through the country’s Muslim north, controlled by the administration of Sudan’s President Omar al Bashir.

Increasing Sudan’s militancy over revenue issues with its newly independent southern neighbor is the fact that Sudan is currently suffering from extensive corruption, a $38 billion external debt burden, rising inflation and U.S. sanctions. Of these burdens South Sudan is equally subject, though not to Washington’s proscriptions of the new nation being a supporter of international terrorism.

But an element of South Sudan politics is also roiling Juba’s relations with Washington.

According to a statement released on 21 November by National Security Council spokesman, Tommy Vietor in Washington, White House Deputy National Security Adviser Denis McDonough during a visit to Juba informed the government of South Sudan that it must end all support it provides to Sudan People Liberation Movement North (SPLM-N) that is currently engaged in fighting with Sudan in the border states of Blue Nile and South Kordofan. Vietor stated, “In Juba, Mr. McDonough and Special Envoy Lyman addressed these same crises and the need to respect the sovereignty of Sudan, including by ending support for the Sudanese People’s Liberation Movement-North (SPLM-N) in Southern Kordofan and Blue Nile.” Both states border South Sudan and their population largely fought alongside the south during Sudan’s north-south second civil war, which raged from 1983 to 2005.

Vietor’s statement oddly provides a diplomatic boost to Khartoum, which has already lodged two complaints since South Sudan achieved independence on 9 July with the United Nations Security Council claiming that Juba is aiding SPLM-N fighters. More ominously, al Bashir threatened that Sudan is running out of patience and is prepared to go to war over South Sudan’s support to SPLM-N.

Amum declared, “The Republic of South Sudan is willing to help Sudan in efforts to address its economic crisis resulting from the separation,” reiterating his proposal made a month ago that Khartoum relinquishes its claim on the contested Abyei region and in exchange Juba will offer financial assistance to the north.

All of which begs the issue – where is Juba to get such funds and why exactly should the government of al Bashir agree to what in essence is a bribe?

The broken political crockery of the former state of Sudan is overrun with the toxic elements of massive oil revenues, guerrilla freedom fighters, weaponry and religious and political ideological clashes.

As Sudanese President al Bashir is the first serving head of state to be charged by the International Criminal Court on ten counts of war crimes, crimes against humanity and genocide for the military operations he allegedly oversaw in Sudan’s western Darfur region since civil war broke out there in 2003, it remains unclear as to why he might be amenable to Juba’s fiscal offers rather than simply wading through the country’s blood.

Sudan and South Sudan might be awash in ‘black gold,” but the future seems to indicate that the revenue will be stained with more red from the blood of its people before any resolution to the two nations’ outstanding issues appears. As Washington has essentially pronounced the SPLM-N, an integral part of the new South Sudan government, a terrorist organization, Secretary Amum should not count on Western assistance, however valiant his colleagues’ efforts were in establishing Africa’s newest state.

Accordingly, memo to Juba – you’re on your own.

Cross posted from OilPrice.com

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