Author : Rohit Bansal

Originally Published 2013-12-26 12:06:51 Published on Dec 26, 2013
In March, a "matrix" between the two Sudans set conditionalities and dates both countries must respect. It was an insurance against political vagaries and deep deficit budgets. But with oil revenues falling into Machar's hands, the entire ambit of monies and transit fee from Juba could come unstuck one more time!
Tense X'mas for our Sudan FDI
"It is ironic for an oil producer that fuel is running out in Juba’s petrol stations. Food supply from Uganda and Kenya is dwindling and the South Sudanese pound mangled at 8/USD from about 5/USD just a few months back.

President Salva Kiir Mayardit, who started life as a ranker in the Ananya against Sudan, and rose to unfurl the flag on July 9, 2011 after Africa’s bloodiest civil war, claims he’ll talk to his former deputy and challenger, Riek Machar, sans preconditions.

But Machar, fired from the vice president’s job in July 2013, is in control of the oil-rich Unity province. He understands the importance of a bird in hand: 98 per cent of South Sudan’s revenues depend on black gold, some 220,000 barrels/day progressively pumped out since peace briefly returned April.

2013 couldn’t have ended any worse. The armed forces are divided on tribal lines. Salva Kiir is a Dinka, Machar a Nuer. It was a skirmish on December 15 between Dinkas and Nuers in the presidential guards that triggered what snowballed into defections and ruthless butchering of rival militia.

So, even as Washington was closed for X’mas-NY, US president Barak Obama placed his Africa specialist, Donald E Booth, as special envoy. 150 US marines are landing too. And UN secretary-general Ban ki-Moon wants the number of uniformed personnel serving the UN Mission in South Sudan (UNMISS) increased from 7,500 to 13,000.

All this has two direct implications on us.

First, as the highest contributors of men to UNMISS. After Thursday’s killing of two of our soldiers, seven out of 10 armed personnel killed in South Sudan this year have been Indians. Will the UN secretary-general’s call for expanding UNMISS involve more deployments? After all, we, alongside Bangladesh and Pakistan, are among the largest contributors of men to UN Peace Keeping.

Related is the security of 25 per cent shares in pre-bifurcated Sudan’s oil consortium, the Greater Nile Petroleum Operating Company (GNPOC), that ONGC Videsh Limited (OVL) acquired thanks mainly to late Brajesh Mishra, the national security advisor and principal secretary to Prime Minister Atal Behari Vajpayee.

All OVL men stand evacuated on grounds of safety or scheduled rest and recreation. But 24.125 per cent in Block 5A and 25 per cent in Block 1, 2 and 4 in the two Sudans are still left behind∗∗!

After independence in July 2011, Block 5A found itself in South Sudan, while fields in Block 1, 2 and 4 were split between the two countries. Production from Block 5A was some 16,000 barrels/day before the shutdown of operations in January last year. It resumed on April 6, reaching 5,000 barrels/day before fighting restarted December 15. The parts of Block 1, 2 and 4 in South Sudan started output on April 13 and were producing less than 20,000 barrels/day. 60,000 barrels/day was the aim in coming weeks.

India has joint operatorship of Block 5A with Petronas of Malaysia. In Blocks 1, 2 and 4, we’re in truck with Chinese CNPC, Petronas and Nilepet. Here, OVL’s share of production has been 1.324 million metric tonnes (mmt) in 2011-12 and 1.801 mmt in 2010-11, including acreages on the northern side which must be counted because the blocks are spread over both Sudans. Production on the northern side dipped after Jan 21 last and had to stopped after the central processing facilities in Heglig to the marine terminal were bombed heavily.

The Machar-Salva Kiir fight has roots in undivided Sudan. Machar hasn’t broken the umbilical cord with Khartoum. This complicates matters: In March, a "matrix" between the two Sudans, brokered by the African Union, set conditionalities and dates both countries must respect. It was an insurance against political vagaries, deep deficit budgets and starving bureaucrats and army men of their salaries. But with oil revenues falling into Machar’s hands, the entire ambit of monies and transit fee from Juba could come unstuck one more time!

Rohit Bansal's article

(The columnist is a Visiting Fellow, Observer Research Foundation, Delhi and CEO & Co-Founder, India Strategy Group, Hammurabi & Solomon Consulting)

Courtesy: The Pioneer, December 25, 2013

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Rohit Bansal

Rohit Bansal

Rohit is an alum of Harvard Business School and St Stephen’s College. He is a British Chevening scholar and has undertaken short professional programmes at ...

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