Page 10 - AfrOil Week 10 2020

AfrOil POLICY AfrOil
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“The previous government has been selling oil in advance, and there has been huge corruption in the oil sector as a whole,” he said.
SPLM-IO would like to see the unity gov- ernment abandon such arrangements, Oryema declared. “We want the oil revenues to be made transparent and the sale of oil in advance to stop,” he said. “We would also like to see an envi- ronmental audit carried out because the sector has serious pollution issues.”
As of press time, SPLM-IO’s coalition part- ner, the Sudan People’s Liberation Movement (SPLM), had not responded to Oryema’s state- ments. The two sides have been at odds since late February, owing to disputes over the allo- cation of ministerial portfolios in the unity government.
SPLM is led by South Sudan’s President Salva Kiir Mayardit, while SPLM-IO is led by former Vice-President Riek Machar Teny Dhurgon. Machar had previously served as vice-president, but Kiir fired him in 2013, alleging that he had been planning a coup. After years of conflict, Kiir’s administration finally struck a deal with Machar last year on the formation of a coalition government. The two sides formally established a coalition government on February 22 but have yet to fill all 35 cabinet positions.
Other critics
SPLM-IO is not the only critic of Juba’s practice of making pre-sale financing arrangements for the country’s oil exports. A number of multi-na- tional lenders have also spoken out against such deals, which allow the government to spend the proceeds of crude sales in advance, and the International Monetary Fund (IMF) has recom- mended discarding them completely.
Emilio Manfredi, the co-ordinator of the UN Panel of Experts on South Sudan, has spoken similarly. Last month, he told other UN officials during a briefing that advance transactions gave Juba opportunities to handle oil revenues in a non-transparent manner and to spend the pro- ceeds of crude sales without engaging in proper accounting or planning processes.
His words echoed the UN panel’s interim report on South Sudan’s sanctions status, which was drawn up last November and then tabled in February. The East African quoted the report as saying that the UN body had been “unable to
verify the financial liabilities of the government related to oil advances, cargoes and repayment terms because the government has not released current data on oil sales or published its market- ing report, in accordance with the stipulations in the [peace] agreement on transparency and accountability.”
The ministry’s pledge
South Sudan’s Ministry of Petroleum recently made a very public statement about its commit- ment to transparency.
In its seventh annual report, which was published shortly before the establishment of the coalition government, it said: “We are try- ing to increase transparency in the country’s oil and gas sector, specifically concerning the financial aspects. The Ministry of Petroleum has produced this journal, which will provide all the information about our production, sales and even the environment. We include all the opportunities in South Sudan regarding refiner- ies, pipelines and other facilities. All this infor- mation is now available, and everyone will have access to it.”
The report also said that the ministry was “dedicated to forming an institutional structure and establishing business relationships in an open and transparent manner.” To this end, it said, the Ministry of Petroleum will issue press releases with details on oil production volumes, recent crude sales and oil revenues, as well as tariff and assistance fee payments to neigh- bouring Sudan and other relevant data related to marketing. (Sudan controls the pipelines that are the only export route for South Sudan’s oil.)
Improvements in business practices are sure to benefit the country, the ministry added. “Transparency in marketing is the cornerstone to growing a new international customer base mandated to conform to the highest ethical standards and to ensure oil revenue cash flows are conducted through proper channels,” it said.
Despite these lofty sentiments, South Sudan still has a long way to go on this front. Last year, President Kiir launched an investigation into advance sales shortly after he fired Petroleum Minister Ezekiel Lol Gathuoth and named Daniel Awow Chuang as the next head of the ministry. To date, it has not made the results of the probe public. ™
The UN has called on South Sudan to end advance oil sales (Photo: Global Witness)
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w w w . N E W S B A S E . c o m Week 10 11•March•2020