Sudan's Oil Industry on the Eve of the Referendum

With the elections of April 2010, Sudan passed a major milestone of the 2005 Comprehensive Peace Agreement (CPA). Despite major flaws in the electoral process, the results have been widely recognized by
the outside world. The NCP and SPLM remain firmly in power in the North and the South respectively.

The next and even greater challenge ahead lies in the referenda in Southern Sudan and Abyei, scheduled for January 2011. With popular sentiment in the South decidedly in favour of secession, the NCP and
SPLM are preparing for a possible break-up of the country. On 6 July, negotiations for post-referendum arrangements started in Khartoum. Finance will play a key role in these negotiations. Sudan’s substantial oil industry is the dominant money-maker for the country’s two governments and to split it up will be an extremely complex and sensitive operation.

Oil has also been a driver of past conflict.2 However, the significant wealth that oil generates is equally important to both parties and if they agree on a mutually satisfactory formula, oil could be the foundation for a peaceful future. The time is now ripe to seize the opportunity to make the country’s natural resources benefit the people.

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