KENYA: Khartoum underpays South Sudan in oil revenue, report says.

Record ID: 343522

  • Title: KENYA: Khartoum underpays South Sudan in oil revenue, report says.
  • Date: 8th September 2009
  • Summary: NAIROBI, KENYA (SEPTEMBER 7, 2009) (REUTERS) GLOBAL WITNESS PRESS BRIEFING GLOBAL WITNESS LOGO GLOBAL WITNESS CAMPAIGNER ROSIE SHARPE SPEAKING TO JOURNALIST (SOUNDBITE) (English) GLOBAL WITNESS CAMPAIGNER ROSIE SHARPE, SAYING: "The discrepancies that we found between what the Khartoum Government and what the major oil companies in Sudan say is the amount of oil being
  • Embargoed: 23rd September 2009 13:00
  • Keywords:
  • Location: Kenya
  • Country: Kenya
  • Topics: International Relations,Energy
  • Reuters ID: LVACGD7BDG3VULZJ0XLSFGAKPQ41
  • Story Text: UK-based NGO Global Witness releases a report on findings that Khartoum's government could be underpaying south Sudan's government hundreds of millions of dollars in oil revenue.
    Campaigners said on Monday (September 7) they had found grave 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 Non-governmental organisation 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).
    "The discrepancies that we found between what the Khartoum Government and what the major oil companies in Sudan say is the amount of oil being produced -- they vary between 9 and 26 percent -- so if we take the most conservative of those figures... say about 10 percent, that would add up to 600 million dollars that could be the amount owed to the government of South Sudan," said Rosie Sharp of Global Witness.
    Noone 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.
    Sudan currently pumps some 500,000 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.
    Sharpe said a lot of the oil money from both the north and the south were being used for arms, raising fears that a greater conflict may re-ignite.
    "Both the Government in Khartoum and Government in Juba are currently spending a lot of their budgets on re-arming; estimates are difficult to come by but it seems that about 50 percent both North and South is spent on building up their militaries. In our view this is a set put. It is a worrying issue but it is a set put issue, from the implementation of the peace agreement which needs to be implemented fairly," added Sharpe.
    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 (NCP), 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 percent 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 percent difference between government and CNPC reports for blocks 1, 2 and 4, combined with block 6, also controlled by CNPC.
    The study found an inconsistency of 14 percent 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 northern 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.
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