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India over a barrel for Sudan oil venture
By Katy Salmon
NAIROBI -
India is making a "fateful mistake" by investing in oil
in Sudan, warn rebels of the Sudan People's Liberation
Army (SPLA).
Last month, the Indian cabinet
voted for state-run Oil and Natural Gas Corp (ONGC) to
invest US$750 million in the controversial Sudanese oil
project.
"No company should get involved in
exploration or exploitation of oil in Sudan during this
time of war, whether it is Indian, Canadian or Chinese.
The benefits of this oil do not go to all the Sudanese
people. Only the National Islamic Front is using the oil
revenues to buy more arms and kill the people," says
SPLA spokesperson Samson Kwaje.
"This is a
government that is abusing human rights, that is killing
its own people. It's a government that is bombing its
people. So for the Indian government to deal with them,
they are being not only insensitive but also this is a
disrespect of humanitarian law. We appeal to the
international community, India being a member of the
United Nations that has signed bills of rights and
covenants, to get India to respect international law,"
he says.
India is buying Canadian company
Talisman Energy's 25 percent stake in the Greater Nile
Petroleum Operating Company (GNOC). The company began
producing oil from a concession near Bentiu, 750
kilometers southwest of Khartoum, in August 1999. Oil
exports have brought billions into the coffers of the
debt-ridden Sudanese government.
Talisman bought
into the project in 1998. Ever since, it has struggled
to defend itself from a barrage of criticism from
shareholders, the Canadian public, and human rights and
church groups who, like the SPLA, say that the oil is
fueling the war. Non-governmental organizations such as
Christian Aid charge that the government is using a
"scorched earth" policy to clear the area of civilians,
making it safe for investors.
These accusations
have taken a heavy toll on the share price of the
Calgary-based company, listed on the Toronto and New
York stock exchanges. Finally, Talisman has bowed to the
pressure. But Talisman's chief Jim Buckee does not see
the sale as an admission of wrong. Not only will
Talisman clean up its image in the eyes of morally
conscious observers, but it also stands to make a tidy
profit. Buckee describes the deal as "a very good
exercise for our shareholders".
The project
includes a 12-million acre concession and a 1,500
kilometer pipeline to the Red Sea. In the last two
years, GNOC's production has risen from a lucrative
230,000 to 260,000 barrels a day. The company plans to
increase this to 290,000 barrel per day (bpd) in the
future.
But despite the financial incentives,
the SPLA predicts that India will live to regret the
investment. "Morally it is wrong and the only solution
that we can employ - as the Sudanese people - is to shut
it down. To us, all oil installations in the country
remain a legitimate military target," Kwaje reaffirms.
"Let them do what they can with Khartoum, whatever deal
they can make, but they stand to lose at the end," he
says.
India is desperate to buy equity in
foreign oilfields to compensate for declining output at
home. India imports more than two-thirds of its crude
needs for its 17 refineries that process 2.3 million
barrels per day. ONGC aims to recover its entire
investment in five to six years, assuming a crude price
of about $19 a barrel, and that the rebels do not
disrupt production.
For Indian oil minister Ram
Naik, his country's energy needs are more important than
possible protests or rebel attacks. "The Chinese are
there, the Malaysians are there, and we have good
relations with Sudan," he argues. The other partners in
the venture are China National Petroleum Corp, with 40
percent, Malaysian state oil firm, Petronas, with 30
percent and Sudanese state-owned Sudapet with the
remaining 5 percent.
Unlike Talisman, which went
to great lengths to mount a moral defense of its
investment, the Chinese and the Malaysians have shown no
such qualms. The SPLA says that these international
investors have not contacted them to hear their side of
the story. "We don't speak to them. They ignore us,"
says Kwaje.
As a result, he charges, they remain
ignorant of the effects that their business venture is
having on the people of south Sudan, where the oil
fields are located. "Most of them do not know the
realities of the war. They don't even know where the oil
fields are. The government is deceiving them in Khartoum
that the oil fields are in the north," he says.
Sudan's civil war, the longest running in the
world's history, has taken nearly two million lives and
left millions more displaced. In the most recent of many
government changes over the decades, in 1989 a Khartoum
military extremist group overthrew the democratically
elected Sudanese government and now rules in the north.
In essence, the civil war, often labeled a "Holy War",
is between indigenous African rebels in the south and a
dictatorial Muslim government in the north.
Sudan's oil exports have given fresh impetus to
Sudan's 19-year-old civil war. A new report by
Brussels-based think-tank International Crisis Group
(ICG), "Organizing for Peace as the War Escalates", says
that oil revenues have allowed the government to
purchase increasingly lethal weapons and expand its use
of air power.
Khartoum's "battlefield edge will
be heightened by the government's purchase from
Australia of airboats designed to travel in swamp
environments and especially useful in the oilfield areas
of Upper Nile," say ICG. "Their superiority will be
further enhanced when newly acquired MiG-29s and search
and acquisition radar become operational. One military
analyst predicted that with Russian or Ukrainian pilots
as part of the package, these MiGs will provide an
integrated system that will be able to shut the airspace
down," says the report.
The government in
Khartoum denies that oil revenue is being used to step
up its military campaign and says it is willing to share
oil revenues equally among the people of Sudan. However,
the SPLA wants the concessions shut down until there is
peace.
Last year, the US House of
Representatives overwhelmingly passed a bill to bar oil
companies with investments in Sudan from raising capital
on US markets. But it has been unable to make it through
Congress because of opposition from the government and
Wall Street.
(Inter Press Service)
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