Africa, Business, Politics

South Sudan signs first oil contracts

By Simon Allison 16 January 2012

The government of South Sudan has put pen to paper on the first oil contracts to be signed since independence, giving four companies access to the new country’s lucrative oil fields. That these companies all have a distinctly Asian flavour might show that the west doesn’t have as much influence in South Sudan as they’d like to think. By SIMON ALLISON.

Conspiracy theorists would have us believe all the wars in the 21st century have their roots in one simple commodity: oil. That’s why the US invaded Iraq, that’s why intervention was pushed in Libya and why the west was so keen to see the birth of an independent South Sudan. These theorists might not be all that far off the mark, which is why the latest development in South Sudan is especially interesting.

The new country, still struggling to establish itself, has awarded the first batch of oil contracts since independence to the China National Petroleum Corp, the China Petroleum and Chemical Corp, Malaysia’s Petronas and India’s Oil and Natural Gas Corp. Whether these companies offered South Sudan the best deals, or whether their choice is indicative of a shift in the new government’s political orientation remains to be seen.

Either way, there are plenty of obstacles to be overcome before South Sudan’s oil can be exploited efficiently. Most notable is that the only way to currently get the oil out is through Sudan proper, and Khartoum is already causing problems by restricting access to pipelines and demanding exorbitant transfer fees. China, however, exerts significant influence in Khartoum, and will be unlikely to allow Sudan to come between it and South Sudanese oil, which fulfils some 5% of China’s energy needs. DM



Read more:

  • South Sudan signs first oil deals since independence in the Africa Review.

Photo: South Sudan president Salva Kiir (Reuters)

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