South Sudan’s Energy Solution

June 14 Main Image

South Sudan has estimated oil reserves of over 3.5 billion barrels whereas its neighbor Sudan has only an estimated 1.5 billion barrels in reserve.

When South Sudan split from Sudan and became the world’s youngest country in 2011, it took with it most of Sudan’s oil and natural gas reserves. Natural resource issues were one of the main reasons behind the Second Sudanese Civil War that raged from 1983 well into the 2000’s and claimed millions of victims. This crisis spawned the horrific humanitarian disaster in Darfur that is still occurring to this day.

In 2005, an agreement was brokered that led to the creation of South Sudan in 2011 following a referendum. Finally, it seemed as though a tepid peace was coming to this war torn region, yet this mirage quickly faded. In 2012, skirmishes broke out between the two Sudans over oil transportation and the illegal seizure of oil fields. Most recently, a civil war has erupted in South Sudan in 2013 following the removal of the Vice President Reik Machar over a suspected coup attempt. Since then, factions close to the President Salva Kiir have been locked in a bloody struggle against Machar militants. In this conflict, oil fields and production facilities have been used as pawns to gain economic edges. Generally however, the current civil war is fought almost exclusively over political reasons – economic, humanitarian, and human rights issues have been relegated as secondary concerns.

98% of South Sudan’s revenue comes from the sale of oil and since the beginning of the conflict in December, oil production is down over 20%. South Sudan’s vast energy resources should provide ample sources of economic growth and development for the countries 10 million + citizens. Furthermore, the countries proximity to the Indian Ocean has peaked the interest of many Asian oil conglomerates with Chinese, Indian, and Malaysian companies all involved in the country. The market for their oil clearly exists and South Sudan has the opportunity to lift itself out of conflict and poverty – provided its leaders agree to work together. Yet, in spite of all the opportunities for development that energy resources bring to South Sudan, the country is currently gripped by a massive food shortage that has caused a crippling famine in the country. The United Nations estimates that over 50000 children could be succumb to death from disease or malnutrition this year without immediate help from the international community.

Recent peace efforts spearheaded by US Secretary of State John Kerry have led to a provisional agreement which appears to have stopped the fighting. The two sides have given themselves 60 days to form a transitional government and must cease all military actions during the negotiations. As of this writing, it appears the peace will hold, but it is noteworthy that it only came about once the threat of direct sanctions against the individuals involved in the conflict were made. The next step for South Sudan is to solidify its bitter peace and tend to the immediate needs of its people (clean water, abundant food, basic shelter, etc…). Going forward however, South Sudan must capitalize further on its energy resources. The demand is clearly there. Selling South Sudanese oil to Asian markets will help enrich both the leaders of the country and (at least hopefully) contribute to the development and poverty alleviation of the millions of refugees and internally displaced people in South Sudan. To be sure, oil is not the answer, but it is undoubtedly a strong way of motivating all sides to work together and contribute to the strengthening of this infant state.

For more on the statistic:

http://www.eia.gov/countries/cab.cfm?fips=su

Other relevant links:

http://www.independent.co.uk/news/business/analysis-and-features/oil-saviour-or-curse-for-south-sudan-9075890.html

http://www.independent.co.uk/news/world/africa/south-sudans-dwindling-oil-output-forces-china-to-step-in-to-protect-its-investments-from-the-ongoing-rebellion-9496895.html

http://blogs.wsj.com/frontiers/2014/05/26/south-sudan-and-sudan-team-up-to-repair-damaged-oil-fields/

http://www.arabnews.com/news/573011