The recent signing of an agreement to end 2 decades of civil war in Sudan could bring the opportunity for millions of people to return home and begin new lives, as well as a chance for investors to make money in a needy country with large oil reserves.
The Comprehensive Peace Agreement was signed in Nairobi, Kenya, on Jan. 9 by the Sudanese government and the rebel Sudan People's Liberation Movement/Army (SPLM/A).
As a result, some experts believe that oil and gas companies will move quickly to expand Sudan's oil production from the 345,000 b/d recorded in June 2004.
The country has reserves of 635 million bbl, much of which couldn't be accessed during the war due to the fighting.
Issues remain
But a number of issues remain to be settled before the oil industry can be certain of its prospects in the African country.
Indeed, as the experience of one British company already shows, the civil war may still be under way when it comes to signing deals in Sudan.
British-based oil exploration firm White Nile, whose stock prices have soared since being listed in early February, said on Feb. 16 it had signed a deal with "the government of South Sudan" for a 60% stake in the 67,500 sq km Block Ba, which contains part of the key Muglad basin production area.
But the Sudanese government in Khartoum said on Feb. 21 that it alone had the power to grant oil concessions.
"The energy and mining ministry is the only body authorized to grant oil exploration contracts in the Sudan, and we have not done so [for White Nile]," said a government spokesman.
White Nile responded the next day by claiming that its deal with the soon-to-be-formed government of South Sudan (formerly the SPLM/A) for exploration rights to the block would hold.
That could be true. But even comments by SPLM/A leader John Garang leave one to feel a little uneasy.
"Under the present arrangements, we are part of the central government, and at the same time the government of southern Sudan enjoys complete self-rule," Garang told the Arabic Asharq al-Awsat newspaper on Feb. 13.
Self-rule
Garang said the government of southern Sudan will have its own sources of revenues, including "50% of the oil revenues and 50% of the nonoil revenues that will be collected in southern Sudan" as well as its own tax authorities and the right to ask for international support.
"We are in a situation where there is a government that enjoys self-rule, has its own independent army, participates in the central government, and has its own resources."
These are very confusing times in many places, and it will doubtlessly take a few days to get to the bottom of the situation in the Sudan. Much depends on the outcome—not least whether White Nile will soon turn blue.
