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Economy

Sudan opens new oil field

Sudan has opened a new oil field on the border between East Darfur and South Kordofan. Tensions in the region represent a major challenge for smooth oil production.

Sudan now has two new oilfields, the first in Al-Barsaia in South Kordofan, the second at Hadida on the border between East Darfur and North Kordofan. Before the inaugaration at Hadida, inhabitants of East Darfur threatened to disrupt work at the field unless the central government of Khartoum accepts it as being part of East Darfur.  Alex Vines, what is behind this demand?

Alex Vines: Clearly the people of East Darfur want  to see benefits from it. This isn't unusual or restricted to Sudan. I think this is a normal sort of situation where, once an extractive industry begins to operate, local communities want to see what benefits they can gain from it.

My hope is that the Sudanese government manages this very carefully, otherwise it could be quite difficult for production in the future.

When do you think oil will start flowing from this new oilfield?

That's difficult to say.  It will partly depend on how well developed the infrastructure is to serve the oilfield and on local politics.

Where do you think Sudan is getting the funding from? We understand the economy is really doing badly.

The economy of Sudan is doing badly. I think it will be able to find some loans from countries like China and maybe India or Malaysia. These countries have supported and invested in oil infrastructure in the past. I think those would be the most likely places to provide some funding, maybe also Iran.

Sudan has opened two new oil fields within a week.  Will they make any difference to Sudan's battered economy?

No, the economy is, as you say, very battered. It's been greatly traumatized by the separation between North and South Sudan last year. What's more important is managing the border between the two and ensuring that the cross-border oil agreement actually operates and the disputed border zone doesn't become violent. I think Sudan will extract major taxes and royalties for using the pipeline that goes to Port Sudan.

So Sudan does not have enough crude oil deposits to shore up its economy?

It has oil deposits but I think it's more important that it continues to encourage the export of oil from South Sudan. Events in recent days along the border zone are very worrying, with accusations of border violence emerging again.

The new field is located on the border with East Darfur and South Kordofan, both very volatile regions in terms of security. Will that not affect production?

It will have an effect. Kordofan and Darfur are part of a wider problem of core periphery issues that Sudan has suffered in that it was a contributing factor in terms of separation from South Sudan.

(FILE) A file picture dated 19 January 2010 shows Sudanese President Omar el Bashir (R) and First Vice President and President of the Government of Southern Sudan, Salva Kiir Mayardit (L), participating in celebrations marking the 5th anniversary of the signing of the Comprehensive Peace Agreement (CPA) in Yambio, Sudan. Omar el Bashir has won the country's first multiparty elections in 24 years, election officials said on 26 April 2010. The polls are supposed to usher in a new era of democracy in Sudan, which is recovering from a decades-long civil war between the north and south. EPA/TIM MCKULKA - UNMIS - HANDOUT EDITORIAL USE ONLY/NO SALES +++(c) dpa - Bildfunk+++

Differences remain between Sudan's President Bashir (right) und Salva Kiir of South Sudan

The Kordofan-Darfur issue is a live one and the challenges for oil production again show why Khartoum needs to rethink how its relationships are with the constituent parts of what is still Sudan.

Oil was and is still at the center of the dispute between North and South Sudan. Do you see this dispute being resolved soon?

No. On December 27, 2012 both sides accused each other of military incursions into disputed areas which is a new setback to plans to resume the cross-border flow of oil. This is very worrying. There have also been allegations that five people were killed when Sudanese planes bombed Kiir Adem which lies inside the 14 mile-wide (22.5 kms) strip of land claimed by both countries. So I don't think 2013 is going to be any more stable than 2012 has been.

Alex Vines is the head of the Africa Program at Chatham House in London

Interview: Chrispin Mwakideu

DW.DE