South Sudan opposition party calls for auditing of oil companies
February 23, 2012 (JUBA) – The African National Congress (ANC) Party an opposition party in South Sudan as asked the Juba government to review and audit the records of all oil companies operating in exploration and production.
Seven month old South Sudan stopped oil production this month accusing North Sudan of siphoning off and stealing it’s crude over a dispute over transit fees.
This week South Sudan ordered the head of Petrodar to leave the country within days accusing the Chinese-Malaysian company of dishonesty.
South Sudan’s ministry of petroleum says that when it went through the process of stopping oil production from Petrodar’s oil fields in Upper Nile State it discovered that the company was producing 40,000 barrels per day (bpd) more than the 230,000 bpd it was declaring.
Petrodar – a consortium comprised mainly of China National Petroleum Corporation (CNPC) (41%) and Malaysia’s Petronas (40%) – denies not revealing the true amount of oil-production and diverting southern crude as it passed through north Sudan.
However, South Sudan is also frustrated that Petrodar has not moved its main headquarters from Khartoum to Juba.
The ANC recommended that the government choose oil companies, which respect the sovereignty of South Sudan and expel companies if they are proved to have played any part in North Sudan’s acquisition of southern oil.
Due to sanctions placed on Sudan and Khartoum’s strategic alliances with Asia, western oil companies have largely been excluded from oil contracts. South Sudan’s independence has given the opportunity for Juba to realign its oil contracts inline with its own international interests.
There is considerable distrust among the South Sudanese government in relation to the current companies working in South Sudan, many of whom signed contracts with Khartoum and began working in South Sudan before the 2005 peace deal ended decades of conflict.
This week Juba accused unnamed oil companies of constructing a tie-in pipeline to siphon of South Sudanese oil as travels north to Port Sudan on the Red Sea.
The north admits taking some of South Sudan’s oil but says it is payment in kind for $1 billion of unpaid fees. Juba says it has paid the fees and rejects Khartoum’s demand for $36 dollars for each barrel of oil exported using northern infrastructure.
South Sudan is now considering bypassing the north and building a pipeline to Djibouti or Kenya – but analysts say its hope to build the new pipe before the end of the year are very optimistic.
African Union sponsored talks have failed to bring the sides to agreement.
On Thursday the spokesperson of the ANC said his party appreciated the decision to shut down oil production, despite the negative affect it will have on the economy of the severely impoverished nation. Austerity measures have been anounced by the government in an attempt to mitigate the loss of 98% of state funds.
However, the ANC’s Albino Akol Attac said the government should have stopped production in the day South Sudan became independent rather than let the situation continue without an agreed deal.
From 2005 until 9 July 2011 revenues from southern oil were split 50:50 between north and south.
The opposition party also urged the government not to begin pumping oil through north Sudan until Khartoum agreed to be paid $0.12 and $0.60 a barrel. A fee that they say is internationally acceptable.
“We in the ANC and the entire people of South Sudan will not accept to pay land transit fees reaching one dollar, the government and the political parties [need] to get prepared to take responsibility of protecting the country’s wealth from being looted and robbed,” Attac said in a statement.
The party advised the government to pursue non-oil revenues and make its other resources profitable. South Sudan has vast swathes on fertile land than is not cultivated due to a variety reasons ranging from insecurity, lack of equipment and investment, a culture of aid dependency, and the feeling among some groups that agriculture in beneath them.
According to the ANC agriculture and small industry should be encouraged and thorough tax and customs system be established. An audit of the first two years of self-rule in South Sudan, following the 2005 peace deal, recently revealed no record of non-oil tax revenues
In their statement the ANC also called for oil refinery to be built in South Sudan for domestic consumption. Currently, despite being an oil producer, South Sudan has to import all its oil and great expense to businesses and traders, raising the price of all imported goods.
(ST)