Sudan’s Underground Conflict

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KAI RYSSDAL: It’s not just Iran that’s the target of a divestiture campaign. U.S. firms doing even indirect business with Sudan have been on the receiving end of protests as well. Warren Buffett’s Berkshire Hathaway, and the mutual fund giant Fidelity are the two best known.

Today, Fidelity said it will reduce its stake in state-owned PetroChina by 91 percent. China buys close to two-thirds of Sudan’s oil exports. Beijing’s been criticized for not doing more to stop the genocide in Darfur.

Wars in Sudan have almost always been over scarce resources above ground. Gretchen Wilson reports there’s a much quieter and more fundamental conflict developing for what may or may not lie beneath.

GRETCHEN WILSON: Camel drivers in Darfur used to take their herds through age-old migration routes. Now they push them further south to follow the receding belts of grass and water. That puts them in direct conflict with farmers and other herders who are all scrambling for the same scarce resources.

And that’s just the turf war above ground. But lines are being drawn for what’s beneath the surface. Abdul-Rahim Hamdi is Sudan’s former finance minister.

ABDUL-RAHIM HAMDI: The geological formations in Darfur are conducive to exploration of oil. You may find oil there. Because oil is in Chad. Oil is in the south.

There’s no seismic data yet of the amount of reserves, but a U.S. Department of Energy official told me there’s “a very good chance” that there are commercially viable oil reserves in Darfur. The U.S. says it has no diplomatic or economic interests here. Joel Mayberry is a spokesman at the U.S. embassy in Khartoum.

JOEL MAYBERRY: Really our focus is responding to humanitarian crisis and urging Sudan to cooperate.

But President Omar al-Bashir is skeptical. He says U.S. humanitarian efforts are really a guise to overthrow his regime. Increasingly analysts point to Iraq and say U.S. interest in Darfur is about gaining leverage in an oil-producing state.

Right now, the U.S. can’t do business in Sudan because of its own trade embargo, designed to put economic pressure on the government. Again, Hamdi:

HAMDI: They want a weak government which they can control or which they can influence. Darfur is a political problem! Designed to cripple the regime and, if need be, to crush it!

French, Chinese and other oil companies aren’t restrained by these sanctions. They’re in a pole position if Darfur’s resources open up.

If reserves are proven in Darfur, it could turn the tide in that region’s conflict. That’s what happened in Sudan’s other war — a long-running civil war between the North and South. After oil was discovered in the 1990s, both sides there agreed to stop fighting in order to collect the oil revenue.

Malik Agar Eyre was a leader in South Sudan’s war against the North, and is now the investment minister. (:19)

MALIK AGAR EYRE: Peace is a key in any country, not only in Sudan. Whatever you have, if you don’t have peace, you don’t have development, and you don’t have capital that is flowing in. Because why would somebody put his money in a sinking boat? Why would an investor do that?

The same logic could foster peace in Darfur. Like the South, rebels there say they want a share of the money that’s concentrated in Khartoum. Under the shaky peace agreement signed last May, Darfurians would have the right to share in any oil wealth.

But some say peace isn’t necessary to pump oil, especially if you do it on the sly. Siphamandla Zondi is director of the Africa program at the Institute for Global Dialogue.

SIPHAMANDLA ZONDI: In many case, maximum exploitation of oil resources using private international companies has thrived when there is chaos, when there is instability, when there is not democracy, when there is dictatorship.

Zondi says while South Sudan’s oil revenue is supposed to be split 50-50 with the North, no one is really watching to see who gets what. Most observers agree the South isn’t yet getting it’s fair share. And the same could happen in Darfur.

ZONDI: Oil has become a curse in Sudan and makes it very difficult to bring about a resolution of the situation there. That means that Darfurians aren’t likely to see a serious move towards peace, simply because they have oil.

No one knows how much oil is in Darfur. Or how much could be coming out. And this will likely not be the last battle fought over Darfur’s resources. There are already rumors of rich deposits of uranium and copper.

In Khartoum, Sudan, I’m Gretchen Wilson for Marketplace.

All reporting by Gretchen L. Wilson, © 2007

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One Response to “Sudan’s Underground Conflict”

  1. Robert Mitchell Says:

    I’m really afraid for the people of Darfur. The government is killing them or hustling them into IDP camps far away from their ancient farmlands. That leaves the newly deserted land wide open for shady oil development.
    I sharply contest Abdul-rahim Hamdi’s claim that, “After oil was discovered in the 1990s [in the south], both sides there agreed to stop fighting in order to collect the oil revenue.” The oil intensified the fighting and provided another reason to fight. The North-South war did not stop until 2005 long after oil was discovered, and the South has yet to see substantial returns from the oil drilled on their land.
    Darfur’s oil (if there is any) will produce the same results: intensify conflict while revenues are funneled to the capitol.