Oil in Sudan has played a decisively negative and nearly menacing role over the past four decades. The oil discovered in Sudan during the seventies did not help to improve the standard of living of citizens in the North or South; it rather undermined the Addis Ababa Sudanese peace agreement of 1972, which ended a long chapter of civil war. Although the oil - which [is extracted] in the South and refined in the North - could have played a unifying role in Sudan, it did quite the opposite. [The discovery of oil in Sudan] introduced further divisions into the country. It still plays a negative role by fueling the [ongoing] conflict, and it undermines chances for cooperation between the two Sudanese states [Sudan and South Sudan]. This precarious situation could bring about massive losses for both states - the least of which would be the huge loss of oil production and export infrastructure. [This infrastructure] would be damaged if the South implements its decision to halt oil production - estimated at $14 billion in 2009.
These are not the only [possible] losses. China’s growing concern over the North may [prompt] Beijing - a key player in [Northern] Sudan - to reconsider its support for [Khartoum].
The large losses that may result from the conflict between [North and South Sudan] over oil will certainly raise questions as to how this situation came about. Knowledge of the conflict’s historical context is necessary for a [balanced] understanding of the situation, and for the design of appropriate solutions that do more than just settle for mounting losses.
The conflict over oil cannot be evaluated apart from the historical interactions between the two states. The South Sudanese understand that late Sudanese President Jaafar Nimeiri’s decision to undermine the Addis Ababa Agreement stemmed from his exploit the oil in the South for the interests of the North. The transitional period (2005 -2011) that followed the signing of the Naivasha peace agreement between the two states reinforced these perceptions in the South. Oil is one of the key components of northern Sudan’s general budget. The North is burdened by heavy spending on the military and security apparatuses due to confrontation against armed factions in Darfur and the provision of security for the regime. This is why the government of northern [Sudan] made sure that the [country’s] oil minister was a northerner. In this context, disputes [between the two states] arose regarding the real amount of [Sudanese] oil production, as it determines the South’s financial dues. A banner welcoming visitors to Juba in 2007 reading “Freedom is ours. Oil is ours. Land is ours”, clearly indicates the priorities of the Southerners and the role oil in the Southern mentality. The transitional period in Sudan did not produce decisive solutions to the contentious issues between the two states: The division of oil [revenues], borders and the future of the Abyei region. On the contrary, during the transitional period the two parties of the [Sudanese] national government, neglected the international mechanisms prescribed for societies emerging from military conflicts or civil wars. [Adopting such mechanisms] would have created an environment [conductive to] drawing down the conflict and advancing an agreement.
The division [between South and North Sudan] has been completed. The South has declared its new state, although it has not reached concrete agreements [on the nature of its management]. In this context, it is only normal that the issue of oil has once again emerged as a point of conflict, especially as [oil] is [the principal] resource of South Sudan. After the division betwen the North and the South, oil conflicts have revolved around determining a fair price for the passage of oil through the North. Whereas the global rate [the cost of shipping] is $3 a barrel, the North demanded over $20 [per barrel].
Tit for Tat
In this context, the North and South have adopted a tit-for-tat approach and a battle of wills has become apparent. The North detained ships loaded with South Sudanese oil, alleging that the South owed nearly $2 billion in late oil transit [payments]. The North’s threat to stop exporting Southern oil was uncalled for, but the South reacted by [the similarly excessive approach of] threatening to cease oil production.
It seems that the current battle between Northern and Southern Sudan stems from the North’s attempt to use the oil - South Sudan’s main lifeline - as a mechanism to resolve the pending issues between the two states, particularly the border disputes and [disagreements over the Abyei province]. [The North has declared that] “there is no passage of oil without an agreement.” What’s more, the foreign role in mediating relations between the two states - a role namely undertaken by the US - has helped to reinforce this Northern stance. This is why American interaction with South [Sudanese officials] has been called a [US] project [that aims to] bringing down the regime of the ruling National Congress Party in Sudan. The South also partially supported the the nternational Criminal Court [ICC] which seeks to arrest [President of Sudan Omar] al-Bashir.
In for the North, the inflammatory and racially-motivated role played by the Just Peace Forum [JPF] and the Al-Intibaha newspaper throughout the transitional period and beyond still contributes to fueling Southern concerns about the North. [Interestingly enough], the key player in the JPF and Al-Intibaha is Al-Tayyeb Mustafa, uncle to President Bashir.
In this context, the Addis Ababa Agreement was aborted in June 2010 by presidential adviser Nafie Ali Nafie, governor of Blue Nile state and real-estate owner Malik Agar and leaders of the Sudan People's Liberation Movement [SPLM]. The agreement aimed to set up strategic relations between Northern Sudan and South Sudan that would lay the foundations for [future] cooperative relations. The approach of supporting insurgents and proxy groups against one another - initially adopted by northern Sudan and later by the South - was key in fostering an environment of conflict.
President al-Bashir plays a prominent role in this conflict. [His role is] largely dictated by the nature of the political decision-making circles in northern Sudan. [Decision making] is not institutionalized and is characterized by instability and a fluctuation of its components of power. All decisions are effectively made by the President.
We cannot ignore the fact that the South has embarked on an approach of paying its dues to the West, to whom is owed the greatest credit for the South’s political and economic independence. The bias of the International Criminal Court, the sale of large expanses of agricultural land from American companies at the cheapest prices, and [President of South Sudan] the priority Salva Kiir gave to visiting Israel above all other countries may be clear indicators of [the South’s efforts to build ties with the West].
The rise of political Islamic currents in Libya and Egypt may have contributed to the South’s [foreign policy stances]. [The South] believes that [ Libya and Egypt] will support northern Sudan because it follows the same political reference. [These alliances might] allow the North to gain superiority in its confrontations with Southern Sudan.
Eventually, a sustained conflict between Northern and Southern Sudan might lead to the destruction of the regimes in the North and South alike. A lack of opportunities for cooperation and mutual support between the two countries will mar development project in South Sudan. This will increase the anger of Southerners toward the political authority, which is already struggling from deadly tribal wars. [These might lead] to inter-tribal genocides that the West will [most likely] overlook or deliberately ignore. In the North, the regime’s cover of legitimacy has rapidly begun to erode - starting with its Islamic base. [The Northern Sudanese people] no longer accept the sacrifice of Northern Sudan’s future to personal political exploitation.