South Sudan could be Africa's newest oil-producing country within two years if southerners vote for independence in a long-awaited January 2011 referendum. Here are some facts about Sudan and its oil industry.
- Sudan produced 480,000 barrels per day (bpd) of oil in 2008 and has proven oil reserves of 6.7 billion barrels. More than 80 percent of Sudan's known remaining oil reserves are located in the south of the country, but most infrastructure including pipelines and refineries are in the north.
- Sudan's production is being driven by new reserves being brought on stream, while production from established oilfields is in decline. Future production will depend heavily on whether new reserves are discovered fast enough to offset total country declines which could begin as soon as 2010.
- Sudanese state-oil firm Sudapet said in July it aimed to increase Sudan's oil production to 922,000 bpd "in the near future" by using enhanced oil recovery techniques. It gave no precise time frame.
- Foreign activity in Sudan's oil industry has come mainly from Asian investment, while Western oil companies have been reluctant to work in the country due to U.S. sanctions and higher risks associated with the country's instability.
- During years of civil war, Western companies came under intense shareholder pressure to exit Sudan. Foreign investors still face the risk of kidnappings and instability despite a peace agreement signed in 2005.
- China National Petroleum Corp (CNPC), Malaysia's Petronas and India's Oil and Natural Gas Corp (ONGC) are among the foreign oil firms in Sudan.
- French Total SA owns 32.5 percent of a consortium that holds the 118,000 square km (45,548 sq miles) block B, the largest concession in the south. Largely unexplored because of the civil war, the north-south petroleum commission has said Total must begin exploration operations as soon as a new company is found to replace the 20 percent of the consortium that is open since U.S. company Marathon Oil Corp (MRO.N: Quote, Profile, Research) was forced to leave because of U.S. sanctions.
Geography, War And Sanctions
- U.S. sanctions on Sudan were first put in place in November 1997 after the U.S. accused Sudan of support for international terrorism. Further sanctions were put in place in 2006 after U.N. resolutions decrying the violence in the Darfur region. The south is exempted from wider sanctions but U.S. businesses are forbidden from any engagement in Sudan's oil or petrochemical industries, north or south.
- Sudan is in North Africa, with a Red Sea port, between Egypt and Eritrea with a population of 41 million. The north is predominantly Muslim and the south is largely Christian. The average life expectancy is 51 years.
- Sudan was embroiled in two prolonged civil wars during most of the second half of the 20th century. These conflicts were rooted in northern economic, political, and social domination of the largely non-Muslim, non-Arab southern Sudanese.
- The first civil war ended in 1972 but conflict broke out again in 1983. The second war and famine-related effects resulted in more than four million people displaced and more than two million deaths over a period of two decades, mostly in the south. Fighting in oil-producing areas between the southern rebels and Khartoum-sponsored southern militias became an important part of the war in the 1990s.
- Peace talks gained momentum in 2002-04 with the signing of several accords. The final North/South Comprehensive Peace Agreement (CPA), signed in January 2005, gave the south it's own semi-autonomous government, headed by the former southern rebels. After the six-year interim period a referendum for southern independence is scheduled to be held in 2011. South Sudan receives 50 percent of government revenues from wells south of a highly contentious north-south border under the accord. The south is 98 percent dependent on these revenues.
- North-south relations over oil have been strained since the signing of the peace accord with fighting breaking out in the oil-rich Abyei region, contested by both sides. Two companies were also given concessions by southern officials shortly after the peace accord was signed. Moldova's Ascom Group was allowed into block 5b and White Nile Plc was given access to Block Ba, a subsidiary of the block B, even though Khartoum had previously given the concessions to a Petronas-led consortium and the Total consortium respectively.