Thursday, 6 January 2011

Sudan needs a more transparent oil sharing deal

A new report published by Global Witness has called on Sudan for more transparent oil revenue disclosures in order to avoid conflict ahead of Sunday's [9th January] referendum on southern independence.

The report stated that with the upcoming “referendum on independence for southern Sudan just days away, oil sector transparency is now more important than ever to preserving the fragile peace between north and south."

The UK based resource lobbyist says that the unclear distribution of oil wealth has contributed greatly to the mounting tensions between northern and southern Sudan. Most of the country's oil comes from the south but the infrastructure remains in the north.

The current oil revenue sharing deal between the two regions indicates a 50:50 distribution, but Global Witness says the two sides need to come to a more transparent and effective agreement to replace the existing one that expires at the end of January.

"There has been much mistrust over whether the current revenue distribution system has been implemented fairly. Mistrust over revenue sharing was one of the primary reasons for the south's temporary pullout from the power-sharing arrangement in 2007. Evidence suggests that such concerns are not unfounded," the report said.

The upcoming referendum is part of the 2005 treaty that ended a two decade war between the north and the south. It is estimated that over 95 per cent of registered voters live in southern Sudan, while the remainder are in the north or abroad.

"With both sides hugely reliant on oil revenues from the south, this issue is paramount going into the referendum… so the single best way to ensure stability after the referendum is to put a transparent and verifiable new oil deal in place," added the report.

Sources: BBC News, CNN, FT, Bloomberg

For more news and expert analysis about the Sahara region, please see Sahara Focus.

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