China, Japan have to press Sudan for transparency in oil figures – watchdog

September 17, 2009 (LONDON) – A global watchdog to exposes the corrupt exploitation of natural resources, urged today China and Japan to press Sudan for greater openness on oil revenues.

The London based Global Witness said in a report published recently that the oil production figures put out by Khartoum government are lower than those put out by the main Chinese operator of Sudan’s oil fields, China National Petroleum Corporation. The report further stressed that there is a difference of figures ranging from 9 to 26% in oil blocks located in Southern Sudan.

The Sudanese presidency upon the demand of Juba government last week ordered the national ministry of energy and mining to verify the revenue figures it received from oil producers.

However, Global Witness said it wants Japan, which is one of the top recipients of Sudan oil as well as China, the main oil producer in the country, to open up their oil production and sales figures to an independent third party in order to audit the information properly.

Oil plays a major role in the Sudanese economy. In 2008, oil represented 95 percent of export revenues and 60 percent of government revenues. For South Sudan (Juba), oil represented 98 percent of total revenues for the year compared to Khartoum at 65 percent.

Further, in 2008, Sudan produced approximately 480,000 bbl/d and consumed 86,000 bbl/d, the remaining 394,000 bbl/d was exported to Asian markets. Sudan exported the majority of its oil to China (214,000 bbl/d) followed by Japan (102,000 bbl/d) and Indonesia (43,000 bbl/d). Additional importers of Sudanese crude include India, South Korea, Taiwan, Thailand and Malaysia.

In 2006; Japan had been the main buyer of Sudanese oil. Tokyo had token 124, 000 barrels per day (bpd) against 99, 000 bpd for China during the same period.

Global Witness said today they want Sudan’s main customers, Japan and China, to press Khartoum to be fully transparent on how much oil it produces and what it is was paid.

China National Petroleum Corporation (CNPC) is the largest foreign oil major operating in Sudan. It is the operator of several major oilfields in the country, also a stakeholder of the country’s major oil pipelines and refinery in the Sudanese capital Khartoum.

Also the watchdog said concerned by the number of exclusive oil deals done with China, which may not ultimately benefit Sudan, and whether the large exploration costs — deducted from revenues — are always genuine.

Japan; which is one of the few countries in the world that has refineries to process the highly acidic Sudan Dar oil blend, is considered by the activists as major player in their campaign for transparency in Sudan oil revenue.

“Japan has a significant influence over Sudan” and “should use the leverage that this near monopoly on refining Sudan’s most abundant oil provides them” to press for greater openness, said Amy Barry, a Global Witness spokesperson today in an interview with Kyodo news.

In a statement released on September 15, Rosie Sharpe, who leads Global Witness’ work on Sudan, welcomed the positive reaction by the Sudanese presidency to their report.

“This is a welcome signal that that the authorities in the north and south may be ready to take steps to improve transparency in the oil sector in Sudan,” she said.

Nonetheless Rosie stressed on the need to conduct this audit by an independent body which should make all the oil figures publicly available.

(ST)