Oil to aid Sudan’s north-south links-Minister


North and south Sudan will keep strong links between their territories and oil industries, even if the south chooses independence in a 2011 referendum, State Minister for Energy and Mining Angelina Teny told Reuters in an interview.

North and south Sudan fought each other for more than two decades in a civil war that was fuelled by a mixture of religion, ideology, oil and ethnicity, Reuters notes.

The conflict, separate from fighting in Sudan’s western Darfur region, ended in the 2005 peace deal which set up a north-south coalition government and promised national elections and a referendum on southern secession.

Many analysts remained concerned that if the semi-autonomous south chooses independence it could trigger a return to hostilities.

Teny, who is from the south and married to south Sudan‘s vice president Riek Machar, said the two parts had a “shared history.”

“Even if let’s suppose that secession happens, it does not mean that this is a total, absolute break-off of all relations,” Teny told Reuters in an interview.

“You can’t have a neighbour that you don’t have relations and joint initiatives with,” she said on the sidelines of an energy conference in London.

Major oil finds, helped by record oil prices of $147 per barrel last year, have helped drive Sudan‘s economic growth. Much of the country’s oil infrastructure is situated in the north, while oil deposits are prevalent in the south. Teny said there were still “shared interests.”

“If that (independence) were to happen you don’t just switch off oil wells just like that,” she said. “Many of the oil facilities and infrastructures are kind of northward so even for you to build a pipeline it takes time.”

Sudan‘s National Petroleum Commission — the north-south body responsible for authorising oil deals — has not met in a year.

Teny said despite this there had been a “close association” between the energy ministry of the coalition government and its counterpart in the south. “The two ministries have been working more closely together of late,” she said. “It is helping progress in the sector.”

Earlier this year Sudan forecast oil production by the end of 2009 would reach 600,000 barrels per day (bpd). “We are still holding to that,” Teny said. “There are lots of new developments and new explorations even in the older fields,” she said.

Oil production was in the region of 520,000 bpd between 2007-2008, Teny said, adding that investment in the oil sector reached about $15 billion at the end of last year.

She said a drop in production of the heavy sweet Nile Blend crude oil of late was a concern, adding that the government had commissioned a study to look into ways to “enhance recovery.”

Teny said a planned joint-venture refinery project between Sudan and Malaysia‘s state oil company Petronas was on hold for now due to weaker oil prices.

“The price of actually constructing the refinery has changed a great deal which means you need to go back to the drawing table,” she said. “It’s not at all an indication that thisproject is going to be abandoned.”