Sudan confident of solving southern oil row – minister
April 4, 2006 (ALGIERS) — The former foes who make up Sudan’s new government will make a “team effort” to solve an oil row that has caused jitters among potential investors, the minister of state for energy and mining said on Tuesday.
Angelina Teny told Reuters a historic 2005 accord ending a long north-south war should dispel any doubts about the former combatants’ ability to negotiate complex problems, even though “things are not easy” in their novel partnership in government.
“I am confident that there are always solutions, because if you can reach a solution to a long and bitter war I am sure that a business dispute should not be more difficult than doing what we acheived as partners,” she said in an interview.
“There are no reasons for anyone to think that investment is not a good thing at this time.”
A year of peace promises to unlock vast oil reserves left untapped by more than two decades of conflict, but oil majors hungry for new sources of energy may not swoop in just yet.
Investors say uncertainty surrounding Sudan’s burgeoning oil sector stems largely from a dispute between UK oil explorer White Nile and French major Total SA.
Shortly after the peace deal, the former southern rebel Sudan People’s Liberation Movement – now the southern government – granted White Nile rights to explore for oil on Block Ba.
But that 67,000 sq km tract is part of a block awarded to Total by Khartoum in a 1980 deal, renewed last year.
CONSENSUS
Complicating things is the fact that there is a new National Petroleum Commission, set up by the peace deal, to broker and approve all oil contracts.
Observers have said its jurisdiction over pre-existing contracts like Total’s is unclear, noting that the Petroleum Reserve Act giving Khartoum the sole right to hand out concessions has yet to be amended.
But Teny, among several southerners given posts in the new Khartoum-based government in the wake of the Comprehensive Peace Agreement (CPA), said that the accord in effect gave the commission the right to decide concessions, both old and new.
It would adjudicate matters such as the White-Nile/Total row on the basis of consensus between its members.
“It is a team effort,” she said.
“The CPA says the Commission reaches decisions by concensus,” she added, noting half the Commission was made of officials of the national unity government and half by those of the southern government.
“It is the body that would deal with policy matters, with regulation matters and with issues of contracts whether previous or existing or yet to be acheived,” she said.
She said there was no time to lose as ordinary Sudanese demanded economic development. “We are under so much pressure to begin to produce results so we have no reason to be sitting over this (oil row) for longer than necessary,” she said.
Sudan currently produces 500,000 barrels of crude oil a day, mainly from fields in the south with output projected to rise by 150,000 barrels per day this year.
Teny said the country’s former Islamist rulers and the former southern rebels sometimes differed over how to implement the terms of the CPA, agreed at talks at Naivasha in Kenya.
“Things are not easy. It was not expected to be easy. Change is usually a very difficult thing to go through,” she said.
“It is true that the implementation is going very, very slowly. There is a lot of resistance to a lot of the stuff that has been agreed in Naivasha. But we are working through them.”
(Reuters)