Politics, Economy, Africa

Despite other rich resources, South Sudan's oil may fuel war

If government is buying arms, military supplies using oil income, then oil has a hand in the country's crises, say experts

Benjamin Takpiny   | 01.11.2019
Despite other rich resources, South Sudan's oil may fuel war

JUBA, South Sudan

South Sudan oil has been fueling conflict in the country as oil revenues have been used to fund war, according to one of the country’s top political analysts.

“The government use oil money to buy arms,” James Okuk of Juba University told Anadolu Agency in the country’s capital, Juba.

“If you’re buying arms using oil money, then oil is contributing to war. If it’s a time of peace then the oil money is not contributing, but people are fighting in the country, which means that oil is contributing seriously.”

He said that if the government is buying arms and military supplies using oil revenues, then oil left its fingerprints on the crisis in the country.

“If you’re recruiting soldiers and the payment is coming from oil money than oil is contributing, unless there are no fighting soldiers. If there are fighting soldiers, then oil is contributing. The supplies you give to the military fueled the war and that makes oil the cause of the instability.”

"Oil revenues and income from other natural resources have continued to fund the [South Sudan civil] war, enabling its continuation and the resulting human rights violations," according to The Sentry, a website focused on “dirty money connected to African war criminals and transnational war profiteers.”

The Petroleum Ministry funded food, fuel, and satellite phone airtime and sent money to militias accused of attacking civilians, the website added.

“They have used the country’s oil to buy weapons, fund deadly militias, and hire companies owned by political insiders to support military operations that have resulted in horrific atrocities and war crimes,” J.R. Mailey, who leads special investigations at The Sentry, said in a statement.

The government dismissed the accusations as a fabrication designed to damage its image.

Oil

In addition to being the world’s youngest country, South Sudan is also the one most dependent on oil, and Dar Petroleum is one of the country’s most important entities.

Dar includes China’s state-owned China National Petroleum Corporation, Malaysia’s state-owned Petronas, Chinese state-owned Sinopec, the private Egyptian-based firm SSTO, and South Sudan’s state-owned Nile Petroleum.

While most of the country’s oil rigs were shut down or destroyed during the long civil war, the oil consortium continued operating.

Oil revenues constitute more than 98% of the government of South Sudan's budget, according to government data.

Since negotiators from the U.S., U.K., and Norway coaxed President Salva Kiir’s forces and rebel groups into a truce and power-sharing accord 13 months ago, oil production has almost doubled to 200,000 barrels a day -- still far less than the 350,000 barrels before the conflict. But the two sides remain at odds over regional boundaries and security arrangements, and prospects are bleak that they will meet a Nov. 12 deadline -- already delayed by six months -- to establish a unity government.

South Sudan slid into crisis when Kiir sacked Riek Machar as vice president in Dec. 2013 on suspicion of plotting a coup.

The country plunged into a civil war that has claimed tens of thousands lives and forced four million people to migrate from their homes.

Both the leaders finally struck a peace deal in 2018, which remains to be implemented.

Oil production from the Unity oilfields, operated by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd and India’s Oil & Natural Gas Corp., has resumed after being halted by the war. And output from the Paloch oilfields, operated by a consortium made up of CNPC, Petronas, Nile Petroleum Corp., Sinopec Corp., and Tri-Ocean Energy Co., which continued operating through the conflict, has been scaled up.

The government is targeting daily output of 250,000 barrels by the end of next year, and ultimately 350,000 barrels from existing fields.

The economy of South Sudan is one of the world's weakest and most underdeveloped. South Sudan has little existing infrastructure and has the highest maternal mortality and female illiteracy rates in the world.

Agriculture

South Sudan is rich in agricultural land and has one of the largest populations of pastoralists in the world. However, since 1999, when Sudan first started exporting oil, agricultural production in the country has fallen. According to the World Bank, the average annual growth rate of the agricultural sector between 2000 and 2008 was only 3.6%, a mere shadow of the 10.8% growth rate of the previous decade.

An extensive satellite land survey done by the UN Food and Agriculture Agency (FAO) showed that just 4.5% of the available land was under cultivation when South Sudan became independent.

South Sudan relies on food imports from neighboring countries, such as Uganda, Kenya, and Sudan. These come at a high transportation cost which, coupled with inflation, have caused food prices to rise dramatically.

The declining agricultural production and reliance on expensive foreign food supplies have contributed to a severe food shortage in South Sudan.

Other natural resources 

There are several marble deposits in the southeastern Kapoeta region, the largest just about 4 kilometers (2.5 miles) from the town of the same name. In 1978, a German cement company discovered about 8 million tons of marble in the area.

South Sudan has a few aluminum deposits, with at least three of the areas containing the mineral at a value above 4.5%. The amount of aluminum reserves in the country is not known but the government estimates it at approximately 10 million tons.

Although South Sudan has several deposits of iron ore, the mineral remains largely unexploited due to the ongoing civil war and lack of proper infrastructure. Many foreign companies have also been scared away by the violence.

Gold mining is the main source of income for people living in the eastern part of South Sudan, especially in Kapoeta, where gold digging is a way of life. However, the country reaps little benefit from the mining, since most of the gold is quickly smuggled out of the country through the black market.

*Felix Tih contributed to this story from Ankara.

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