The Devil Is in the Detail With the New Sudan and South Sudan Oil Deal
Global Witness welcomes the announcement of an oil deal reached by Sudan and South Sudan, while stressing the need for the final text to ensure transparent implementation.
After more than two years of negotiations, Sudan and South Sudan have agreed on financial terms for the export of South Sudan’s oil via Sudan. According to a statement released by the South Sudanese government, South Sudan will pay fees of between US$9.10 and US$11 per barrel for use of Sudan’s pipeline and export facilities. South Sudan has also agreed to provide a US$3.028 billion grant over three and a half years to mitigate the drop in Sudan’s income caused by the south’s secession last year.
“Agreement on the basics of an oil deal is great progress,” said Global Witness campaigner Dana Wilkins. “However, the devil is in the detail, and the long-term success of this agreement will depend on how it is implemented and monitored.”
The 2005 Comprehensive Peace Agreement which ended the last civil war was partly based on a deal to split southern oil revenues 50:50 between the two governments. It contained no safeguards to ensure transparency or independent verification in its implementation, however. The resulting mistrust and concerns over cheating repeatedly threatened the fragile peace.
A proposal for a new agreement published by South Sudan last month provided for a Monitoring Team comprising representatives from both governments as well as international experts. It is not yet clear if this safeguard will be included in the final oil deal. Though a Monitoring Team is a potentially effective way to verify that the agreement is being adhered to, on its own it does not correct the fundamental flaws of the previous oil deal.
To build trust and provide a sustained incentive for peace between the two countries, the text of the final oil deal must guarantee total transparency in its implementation. This includes the publication of:
Regular and timely records of the volume of South Sudanese oil transiting Sudan’s processing facilities, pipeline, and marine terminals.
All payments made and received by either government on the basis of the deal.
Any discrepancies in the records and any concerns raised by the Monitoring Team.
The South Sudanese proposal also called for an audit of the transportation system from the point where the crude oil enters Sudan to when it is loaded onto the ships. Global Witness supports the idea of such an audit and believes that it should verify that all metering stations are functioning properly and that there are effective systems in place for recording volumes. Its results should be published.
“The citizens of Sudan and South Sudan, the rightful owners of these oil resources, must be able to see exactly how this agreement is being implemented,” added Wilkins. “That is the only way they will be able to hold their governments to account and ensure that revenues are used for equitable development and the benefit of all.”