The Sudan Handbook

fRom slaVEs to oil 141

perceptions of a lower likelihood of discoveries. It is risky to look to the

new blocks to reverse Sudan’s existing oil production trend – which is

downward. The ongoing fall in output from the Heglig Basin has not

been offset by the hoped-for new output from other fields, owing in part

to technical problems. As a result, the government’s former forecast

that Sudan would be producing a million barrels a day by 2009 has been

revealed as no more than a pipe-dream – it would be lucky to rise back

substantially above half a million.

The prospects for Sudan’s future oil production, and thus for its

future economic health, are also complicated by politics: in particular,

by north-south relations. The 2005 Comprehensive Peace Agreement

(CPA) stipulated that, at least until the 2011 referendum, 50 per cent of

net government revenue from oil produced in the south should go to the

semi-autonomous Government of Southern Sudan (GoSS), after two per

cent has been allocated to the oil-producing states. However, this still

leaves plenty of room for disagreement, not only because the delineation

of the north-south border has not yet been agreed – with oil revenues

from disputed areas such as Abyei up for debate – but also because of

a general lack of transparency in the sector. The CPA therefore also

provided that outstanding issues should be resolved by a new National

Petroleum Commission (NPC), jointly chaired by the national and GoSS

presidents, with an equal number of permanent members from north and

south, and temporary members drawn from the relevant states.

There were substantial delays setting up the NPC, causing two years

of paralysis in north-south oil sector quarrels. Although the Commission

is now operational, there is ongoing potential for disagreements over a

number of contentious issues. Certain concession blocks in the south have

been disputed, with both the national government and southern militias

awarding competing licences during the years of civil war. Although in

theory these were resolved by the NPC, in practice there were ongoing

competing claims – for example, in Block 5B, where Ascom of Moldova

has been exploring under a GoSS licence, and in parts of Total’s Block B.

A lack of transparency in the sector has been the subject of much criti-

The Sudan Handbook, edited by John Ryle, Justin Willis, Suliman Baldo and Jok Madut Jok. © 2011 Rift Valley Institute and contributors cism by politicians from the south. As well as disputing the allocations

(www.riftvalley.net).