Group Calls For Transparency As Oil Resumes

This article was last updated on May 21, 2022

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South Sudan over the weekend had announced resumption of her oil production which has remained shut since early last year after accusing Khartoum of looting the resource.

“As oil production resumes in South Sudan this week, Global Witness is calling on the government to implement the transparency measures passed as part of oil legislation last year and to clarify recent reports of secretive contract allocations,” Global Witness said in a statement.

“South Sudan’s oil legislation includes clear requirements for the publication of oil sector data and contracts which, if implemented, would enable citizens to monitor and verify the management of their natural resources,” said Global Witness campaigner Dana Wilkins. “This week’s resumption of oil operations will test whether the government’s commitment to transparency is genuine.”

When South Sudan gained independence from Sudan in 2011, it became the most oil-dependent economy in the world, said the activist. South Sudan’s only route to export its crude oil is currently via Sudan’s pipelines and port.

The two countries had spent more than a year and a half negotiating new transit terms when Sudan began confiscating crude oil shipments at the port in late 2011. South Sudan responded by halting all production and exports in January 2012. At the time, oil revenues made up more than 97% of the South Sudanese national budget.

Wilkins said new export revenues, expected by June, will provide South Sudan with much-needed cash and could reinvigorate the country’s struggling economy.

“Risks of corruption and mismanagement in the oil sector remain high, however. in addition to the publication of data and contracts, it is critical that the government immediately addresses ongoing rumours that new oil contracts may have been awarded over the last year, apparently without the open, competitive, and transparent bidding processes included in the 2012 oil legislation,” added Dana.

Global Witness has urged that at a minimum, the government should immediately publish: the most recent oil block map; information on all companies holding stakes in South Sudan’s oil sector; and all existing oil contracts.

There have also been recent reports of damaging changes made to the draft Petroleum Revenue Management Bill she said. The changes are rumoured to include the removal of taxes, signatures bonuses and other fees from the definition of ‘petroleum revenues’ as well as fewer protections on how oil can be used as collateral for government borrowing. If true, these changes would significantly limit the extent to which the management of oil sector revenues is subject to public scrutiny.

She further said that; “if managed well, the oil sector could provide desperately needed development and basic services for South Sudanese citizens,” said Wilkins. “The oil legislation specifically includes the transparency and accountability mechanisms necessary to help make that happen. Now is the time for the government to demonstrate its commitment to openness and public scrutiny.”

The United Nations had yesterday welcomed the resumption of the oil production underlining it portrays easing of relationship between the two long term foe nations; Sudan and South Sudan.