October 26, 2010

Guest Contributor Chris Scanzoni: Sudan, Oil and Security

Though the conflict in Darfur has publicly captivated Americans, U.S. officials are vigorously striving to prevent a war in Sudan that promises even greater human costs. A January referendum for southern secession and the potential derailment of a delicate 2005 peace deal ending a 22-year civil war between the northern Arabs and southern Christians could revive the bloody conflict in the nation. Given the unrivaled importance of the natural resource to the economies of both northern and southern Sudan, U.S. special envoy to Sudan Scott Gration has urged all involved parties to settle an elusive deal on oil reserves to ensure a peaceful transition.

In Sudan, the failure of European-imposed industrialization in the 1950s precipitated massive exploitation of the nation’s natural resources as a source of national income for the nascent African nation. The first major deposits of Sudanese oil were discovered by Chevron in April 1981. Sudan’s then-president Gaafar Nimeiry (with Chevron’s explicit support) quickly abandoned plans to allow local, southern authorities to develop the requisite infrastructure to extract and process the resource. This was an obvious affront to southern Sudan. Subsequent plans to construct a 1,400 kilometer pipeline redirecting the oil to the North compounded southern grievances of underdevelopment and disenfranchisement by northern Sudan and impelled the southern citizenry to resort to civil war.

The predominately rural, agriculture-based southern region suffered more than 2 million deaths and 4 million displaced persons as a consequence of the Second Sudanese Civil War, which lasted from 1983 until 2005. In 2005, due to intense pressure by the United Nations and the George W. Bush Administration, the Sudanese government and the southern authority Sudan People’s Liberation Movement/Army (SPLM/A) signed a Comprehensive Peace Agreement (CPA).  This agreement contained three important features: it established both a new government of National Unity and an interim, autonomous southern Sudan authority; and it set a deal for wealth-sharing, power-sharing, and mutual security arrangements (e.g. ceasefire, withdrawal of troops, and resettlement of refugees). The most prominent condition of the CPA were plans for January 2011 elections, allowing the South to vote to secede or remain a part of Sudan.

Oil remains the central issue threatening the success of January’s elections. While the international community has demanded that both sides react peacefully to the likely split into two nations, many officials remain pessimistic due to the intransigence of both regional authorities to agree on how to share oil resources. The conflict is rooted in the rights to the 1,200 mile oil-abundant border region between the northern and southern authorities. Southern Sudan holds most of the wealth potential with nearly 80% of the nation’s known supply of oil reserves. As a landlocked nation, southern Sudan depends entirely on northern-sponsored pipelines to Port Sudan to refine and export the resource.

Today, Sudan is the third-largest oil producer in Sub-Saharan Africa and produces nearly 500,000 barrels of oil per day (2008 est.), 60% of which goes to China. Likewise, oil revenue represents 60% and 98% of total revenues for the southern and northern governments, respectively. By 2005, the CPA and its wealth-sharing stipulations resulted in a near doubling of Sudan’s total GDP per capita since 2003. While there have been some concerns about inequitable oil dividends to the southern region, it is evident that economic cooperation has been and can continue to be mostly beneficial for both regions.

In January, voters in the south are expected to overwhelmingly support independence from the north. A second referendum allows citizens of the oil-rich Abyei district to side with the north or south. International observers have condemned ostensible stalling techniques by President Omar al-Bashir to delay the referendum (e.g., lack of voter registration, election official training, and printing of ballots). Most recently, Sudan’s Defense Minister Abdel Rahim Hussein suggested that disagreement over border demarcation would most likely force a delay in the Abyei referendum. Tensions have risen as entrenched interests impede election logistics: both the north and the south have accused each other of deploying troops along the border. Notwithstanding reassurances by North Sudan and modest conciliatory gestures by South Sudan, it is increasingly evident to outside observers that neither side will accept any relinquishment of oil wealth.

United Nations Secretary-General Ban Ki-moon recently warned of the impending ‘humanitarian catastrophe’ if the 2005 CPA collapses and violence follows. The collapse of Sudan would pose a major economic and security threat. Sudan’s neighbors would receive an unmanageable number of desperate refugees. Moreover, state failure could hinder oil exports, compelling China, India, and Malaysia to seek fuel elsewhere and forcing up world crude prices for everyone. Specifically, disruption of 7% of China’s oil supply would carry significant short-term harm to a growing economic power. An unraveling of Sudan would also represent a failure of the African Union’s diplomatic power, further delegitimizing an already feeble security organization.

It is no secret that Al-Bashir has willingly harbored Islamist terrorist groups, including Osama bin Laden. Al-Bashir’s links with terrorist organizations pushed the United States to add Sudan to the state sponsor of terrorism list and a suspension of diplomatic relations in the early 1990s. The international community realizes that regional disorder and political vacuums are often filled by extremist groups. Somalia-based and Al-Qaeda allied organization Al-Shabaab would presumably capitalize on the situation and establish a base of operations in Sudan.

The case is clear for vigorous diplomacy to settle the dispute over oil and preempt conflict in Sudan. In July, President Barack Obama’s special envoy to Sudan Scott Gration declared:

This is what our job is right now, to be proactive to do these things, to make sure this does not end up in disaster because as we know in the south, we have lost millions of lives, in Darfur, hundreds of thousands; and the future, unless we get very proactive, it could have disastrous results that pale those numbers.

Chris Scanzoni is a guest contributor to the Natural Security blog and an undergraduate student at the University of North Carolina at Chapel Hill studying International Environmental Public Policy Analysis. He has previously written for the Natural Security blog on his experiences in the Dominican Republic and Haiti as part of a project to get the local jatropha economy running.