Sudan could owe south millions in oil revenue: report

Campaigners said today they had found serious discrepancies in reports of Sudan’s oil revenues which could mean Khartoum’s government was underpaying its strife torn south by hundreds of millions of dollars.
The findings by UK-based Global Witness could spark a political storm in Sudan, where relations between its Muslim north and mostly Christian south have remained tense since the end of their two-decade civil war in 2005.
Under the 2005 peace accord, both sides agreed to share the country’s oil wealth, with the south receiving half the state revenues from the oil drilled from its territory.
Global Witness said it had found revenues from some oilfields published by Sudan’s Ministry of Finance among the figures used to calculate the southern share were lower than revenues for the same oilfields published by operator China National Petroleum Corporation (CNPC).
No one from Sudan’s Ministry of Finance or of Energy and Mining was immediately available for comment.
The study “raises serious questions about whether the revenues are being shared fairly,” said a statement by Global Witness, a group which campaigns against conflict and corruption related to natural resources.
“Mismatches of this magnitude represent potentially massive sums of money.”
Global Witness campaigner Rosie Sharpe told Reuters in an email the extent of the discrepancy varied from field to field and year to year “but is of the order of 10 percent”.
The group’s statement said a total undercount of 10 percent since 2005 would mean “the southern government would be owed more than $600 million (R4571 million).”
Timing sensitive
Sharpe told Reuters the findings did not necessarily mean the Khartoum government was cheating the south out of money.
“It could be that it is the oil company that overstates the figures, although the figures do come from their annual report, an official publication of a multi-billion dollar company.”
Sudan currently pumps some 500000 barrels of oil a day, much of it found in the south.
The findings come at a sensitive time for Sudan, which has national elections scheduled in April 2010 and a referendum on southern independence in 2011. Any return to conflict would have a disastrous impact on Sudan and the surrounding region.
The south’s former rebel Sudan People’s Liberation Movement (SPLM) is part of the coalition government in Khartoum set up under the peace deal. But the SPLM has accused its northern coalition partner, the National Congress Party, of manipulating oil figures, particularly in contested border areas.
The Global Witness report titled “Fuelling Mistrust: the need for transparency in Sudan’s oil industry” said researchers found a 9 % discrepancy between government and company estimates for production in 2007 from Sudan’s blocks 1, 2 and 4, run by the CNPC-led Greater Nile Petroleum Operating Company.
In 2005, Global Witness said there was a 26 % difference between government and CNPC reports for blocks 1, 2 and 4, combined with block 6, also controlled by CNPC.
The study found a discrepancy of 14 % for 2007 figures from blocks 3 and 7, operated by the CNPC-dominated Petrodar.
It said it had not found significant discrepancies for oilfields in north Sudan, from which Khartoum does not have to pay revenues to the south.
Global Witness said there was also a lack of transparency in how Sudan’s national government deducted money from southern revenues for pipeline fees and marketing costs.

Pic: Random oil sub station