Page 6 - AfrElec Week 35

AfrElec COMMENTARY AfrElec
Sudan: What’s at stake
As the country moves into a period of political transition, Sudan’s energy sector deserves close attention
SUDAN
WHAT:
Sudan’s oil portfolio is less impressive than that of neighbouring South Sudan, but it still warrants close attention
WHY:
The country controls the only existing pipelines available for South Sudanese production
WHAT NEXT:
The new transitional government will have to balance oil interest and economic growth with other concerns
THIS year has been a momentous one for Sudan. e country’s long-time leader, President Omar al-Bashir, le o ce in April. He was forced to do so by the Sudanese military, following several months of demonstrations by crowds who began by protesting over economic hardships and then shi ed to calling for the president’s resignation.
Al-Bashir’s departure at the hands of a mil- itary junta, known as the Transitional Military Council (TMC), did not put an immediate end to the unrest. e TMC’s attempts to maintain public order drew heavy criticism from politi- cal opposition parties and protestors, many of whom feared that Sudan might be exchanging one form of tyranny for another. e African Union also expressed concern, saying it was ready to suspend Sudan’s membership unless steps were taken to ensure the country’s transi- tion to civilian rule.
But conditions have improved during the last two months. e TMC struck an informal deal with the wide array of opposition and protest groups that had rallied under the banner of the Forces for Freedom and Change (FFC) on July 5, and the parties signed an o cial agreement outlining their plans for a 39-month political transition period on July 17.
On August 3-4, they approved a constitu- tional agreement that helped flesh out these plans. en on August 17, they formalised the deal by signing a package of documents that will govern the course of the country until elections are held in 2022.
Change
is development sparked celebrations across the country. Demonstrators and FFC support- ers lined the streets of Khartoum and other cities to hail the agreement between the TMC and the civilian umbrella group.
It also cleared the way for the appointment of Abdalla Hamdok, an experienced econo- mist who had previously worked for the UN, as Sudan’s interim prime minister. Hamdok is widely expected to focus his e orts on economic growth – and this is probably a good thing, given that Sudan has enjoyed precious little in the way of growth or stability in recent years.
Indeed, the country’s economy has been going downhill since 2011, when its southern- most provinces broke away to form the new state of South Sudan. ese provinces had been home to the upstream assets that accounted for the majority of the crude produced in Sudan prior to partition. As a result, their loss deprived
Khartoum of revenue from oil export sales – and of raw materials that could be re ned into fuel for domestic use.
Additionally, it made the country less attrac- tive to potential investors. This was not just because it reduced the number of assets to which Khartoum could o er access; it was also a conse- quence of the fact that Sudan and its new neigh- bour, South Sudan, promptly began quarrelling about the terms for the use of an oil export pipe- line – and later engaged in border skirmishes that caused damage to hydrocarbon production, transportation and storage facilities.
It remains to be seen whether the transitional regime in Khartoum can navigate all of these sensitive spots and promote economic growth while also paving the way for a profound political transformation. In the meantime, this essay will take a brief look at what’s at stake – at the oil and gas infrastructure that Sudan still has, even a er the loss of its most hydrocarbon-rich territories.
Upstream
Sudan’s upstream portfolio is less attractive than that of South Sudan.
As noted above, the latter country took pos- It remains to be
session of the elds that accounted for the major- ity of total production prior to partition. is le Khartoum in control of sites that not only yielded less but were also, in some cases, well past their peak.
seen whether the transitional regime can
ese elds have been producing less than
100,000 bpd on average since 2011. Since they navigate
are mature, production is likely to decline fur- ther in the coming years. As a result, they are not the most important component of Sudan’s oil and gas sector.
pipelines that run from elds in the Muglad and Melut Basins to the Bashayer marine terminal, not far from Port Sudan.
One pipeline is operated by Petrodar, a group of companies helmed by China National Petro- leum Corp. (CNPC). It has a capacity of about 500,000 bpd; the other is operated by Greater Nile Petroleum Operating Co. (GNPOC), which is also led by the state-owned Chinese company. It can pump 200,000 bpd of oil through its rst section, which terminates in Heglig, and 450,000 bpd through its second section, which runs from Heglig to Bashayer.
ese two trunk lines handle all of the oil that Sudan produces – and all of the oil that South
sensitive spots and promote economic growth
More crucially, the country is home to two trunk while also paving
Midstream
the way for a profound political transformation
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w w w . N E W S B A S E . c o m Week 35 04•September•2019