Thuli Nhlapo
Two government departments are divided over plans by a state oil prospecting company, to extend its operations into the war-torn Sudan.
The Department of Foreign Affairs has warned the Department of Mineral and Energy Affairs that plans by Soekor, a state-owned oil and gas exploration and production company, to extend its operations into Sudan, could have embarrassing consequences for South Africa and incur the wrath of international human rights bodies.
This controversy comes shortly before a visit by Sudanese Foreign Minister Dr Mustafa Osman Ismail to South Africa. According to the Sudanese embassy in Pretoria, the visit is part of ongoing bilateral relations between the two countries.
But sources close to foreign affairs say Ismail, due in South Africa early next week, is expected to discuss an oil exploration agreement with the government, paving the way for Soekor to enter southern Sudan.
The Department of Foreign Affairs has confirmed that a meeting was held this month, where senior officials briefed mineral and energy affairs and Soekor representatives on the ongoing civil war, and of the damage that South Africa’s reputation may suffer as a result of the company’s involvement in the oil sector there.
Critics claim the oil is being used by both sides to fuel the conflict and that the further development of the oilfields may exacerbate mass displacements of the southern Sudanese population.
The most intense fighting is in the south of the country, around the oil fields. Sudan rakes in an annual profit of about $600-million from the oil-rich Upper Nile fields, but analysts estimate the real fortune lies in the less-explored southern regions.
During the meeting, foreign affairs officials cited the negative media publicity surrounding the presence of foreign companies, such as Canadian petroleum giant Talisman and Sweden’s Lundin, in the region.
According to Roger Ballard-Tremeer, the director of the North Africa desk in the Department of Foreign Affairs, such briefings are routine with companies wanting to do business abroad who need information, including the state of relations between the prospective country and South Africa. He said the department presented both sides to the conflict.
“I think it’s very good that Soekor came to us beforehand, to get a clearer idea of the situation,” Ballard-Tremeer said, adding that Soekor was looking at several different countries to expand into. He also said he was not aware that the company had taken a final decision on the matter.
But matters appear to be pressing ahead. Soekor representative Rima Tshishonga this week brushed aside foreign affairs concerns. She confirmed the briefing had taken place on the political situation in Sudan, but added that it was “all about profits”.
“Ministers advised us on the political situation but oil is viable business: we do not want to only concentrate on the political side because we are in business,” Tshishonga said. However, she said, Soekor had embarked on its own investigation with the help of a Sudanese agency, to assess both the political and economic situation.
Soekor has decided to form “an exclusive study agreement” with Sudanese officials, to examine the possibility of obtaining concessions for oil exploration.
Soekor, which reports directly to the Central Energy Fund (CEF), was formed in 1965 to reduce South Africa’s dependence on imported oil. It explores for oil and gas off South Africa’s shores as well as abroad, with particular focus on Africa and the Middle East.
This is not the first time oil exploration has been discussed with the Sudanese government. According to reports from the Sudan News Agency, a high-level African National Congress delegation, including Deputy Minister of Mineral and Energy Affairs Susan Shabangu, visited the Sudanese capital, Khartoum, earlier this month.
Although attending the country’s 12th National Salvation Day celebrating the military’s coup 12 years ago as an ANC official, Shabangu was widely reported in the local press as saying the visit wanted to look at possibilities of cooperation between the two countries “in all fields”. Shabangu also lauded Sudan’s “great economic accomplishments”, especially in oil production, saying it could bolster joint relations. The deputy minister said a technical South African delegation would soon be dispatched to Sudan to invest in the fields of energy and mining.
Sudan has been in the grip of a devastating civil war for decades, where a battle between the ruling north and various factions in the south for control of resources, including agricultural land and mineral resources, have led to millions of deaths and displacements.
Aid agencies operating in Sudan say the fighting has been exacerbated by the growth of the oil industry.
A coalition of human rights organisations and aid agencies has been spearheading a “Peace First” campaign that has been applying pressure on governments and oil companies against investing in Sudan’s oil sector.