Sudan and South Sudan

In 2005, a historic peace agreement brought an end to Africa’s longest-running civil war – the 22-year conflict between north and south Sudan. Tensions over the distribution of the country’s vast oil wealth had exacerbated the conflict, but oil also provided a key to its resolution.

Sudan’s 2005 Comprehensive Peace Agreement (CPA) was underpinned by an innovative deal to split the revenues from southern oil evenly between the north and south. The agreement changed the role of oil from a driver of conflict to an incentive for peaceful cooperation, and saw Khartoum transfer more than $10 billion to Juba over a five year period. This has been crucial in sustaining the fragile peace.  However, a persistent lack of transparency and independent verification of the revenue split has also fuelled mistrust between north and south.

Global Witness investigations into the management of the revenue sharing deal have revealed discrepancies of 9-26% between the oil production figures published by the Khartoum government and those reported by Chinese state-owned CNPC, the main oil company operating in Sudan. These production figures provide the basis for dividing the oil revenues, so it is crucial that both parties can verify them. The government has responded to Global Witness campaigning by promising the publication of comprehensive oil data and an independent audit of the sector, but has yet to deliver on these commitments.  

The situation today is delicately poised. The revenue-sharing deal ended with southern independence on July 9, 2011, and a new agreement has yet to be reached. With independence, South Sudan took with it more than three-quarters of Sudan’s oil production, but the infrastructure required to export the oil remains in the north. The economies of both north and south are heavily reliant on oil revenues, so agreeing a transparent oil-sharing arrangement which benefits both parties is absolutely crucial to securing lasting peace and stability in the region.

 In 2005, a historic peace agreement brought an end to Africa’s longest-running civil war – the 22-year conflict between north and south Sudan. Tensions over the distribution of the country’s vast oil wealth had exacerbated the conflict, but oil also provided a key to its resolution.

 Sudan’s 2005 Comprehensive Peace Agreement (CPA) was underpinned by an innovative deal to split the revenues from southern oil evenly between the north and south. The agreement changed the role of oil from a driver of conflict to an incentive for peaceful cooperation, and saw Khartoum transfer more than $10 billion to Juba over a five year period. This has been crucial in sustaining the fragile peace.  However, a persistent lack of transparency and independent verification of the revenue split has also fuelled mistrust between north and south.

Global Witness investigations into the management of the revenue sharing deal have revealed discrepancies of 9-26% between the oil production figures published by the Khartoum government and those reported by Chinese state-owned CNPC, the main oil company operating in Sudan. These production figures provide the basis for dividing the oil revenues, so it is crucial that both parties can verify them. The government has responded to Global Witness campaigning by promising the publication of comprehensive oil data and an independent audit of the sector, but has yet to deliver on these commitments.

The situation today is delicately poised. The revenue-sharing deal ended with southern independence on July 9, 2011, and a new agreement has yet to be reached. With independence, South Sudan took with it more than three-quarters of Sudan’s oil production, but the infrastructure required to export the oil remains in the north. The economies of both north and south are heavily reliant on oil revenues, so agreeing a transparent oil-sharing arrangement which benefits both parties is absolutely crucial to securing lasting peace and stability in the region.

Furthermore, as the world’s newest and most oil-dependent country, it is vital that the government of South Sudan immediately demonstrates its commitment to managing its national assets in the best interests of its population. This means managing its oil sector in a transparent and accountable manner from the outset, and enshrining this approach in its legal and regulatory frameworks.

Furthermore, as the world’s newest and most oil-dependent country, it is vital that the government of South Sudan immediately demonstrates its commitment to managing its national assets in the best interests of its population. This means managing its oil sector in a transparent and accountable manner from the outset, and enshrining this approach in its legal and regulatory frameworks.