Sudan’s total oil reserves are not exactly known but estimates have suggested they could be greater than those of Iran and Saudi Arabia together. Infrastructure development is in progress with rising oil exports.

ESTIMATES of how much oil lies beneath Sudan’s desert sands vary from 3 billion barrels to 10 billion. Figures for proven reserves are round the 635-million barrel mark.

President Omar Al Bashir has suggested that Sudan could be richer in oil than Saudi Arabia, the world’s largest producer, while in 1998 Chevron was reported as estimating that Sudan had “more oil than Iran and Saudi Arabia together.”

The truth is that no one really knows, but indications that oil could be present beneath much of Africa’s largest country have sparked exploration activity in areas hitherto left unexplored.

Most of Sudan’s oil fields are to be found in the southern part of the country. The high-producing Higleig and Unity fields are part of the Al Muglad Basin, one of three major basins running from the northwest to the southeast of the country. The other two, the Mulut and Blue Nile basins are yet to be fully explored for oil.

President Al Bashir has confidently predicted that new discoveries will be made this year.

Sudan has been an oil-exporting nation for little more than six years, but the industry has taken off far more quickly than expected. With international prices hitting record highs, the petrodollars are starting to pour in.

Sudan earned $3.7 billion from oil exports in 2005, and the government has predicted an increase to $7.8 billion this year. Oil revenues are expected to contribute around 50 percent to Sudan’s 2006 budget.

The government has based its calculations on a modest estimated oil price of $40. The International Monetary Fund takes a less cautious view. It says higher prices and raised production could increase Sudan’s oil revenues by 22 percent more than originally estimated, forecasting a 13.4 percent increase in GDP.

Production is rising rapidly. The recent opening of a fourth crude oil pipeline with a capacity of 150,000 barrels per day (bpd) has boosted output to more than 500,000 bpd. In a recently broadcast speech, President Al Bashir declared that production could double to one million bpd by the end of this year.

Infrastructure development is under way to facilitate rising oil exports. New export terminals have been established at Bashair, outside Port Sudan, which has been experiencing a notable increase in tanker traffic. New 5-million barrel holding tanks have been installed.

In the 1970s and early 1980’s Chevron was the dominant player, discovering oil fields in southern Sudan after initially focusing exploration on the Red Sea. However, the U.S. giant abandoned its concessions in 1985, due to the fighting in the area between government and rebel forces. Chevron sold its concessions back to the Sudanese government in 1992.

Output has been boosted to more than 500,000 bpd following the opening of a fourth pipeline.

With peace now facilitating rapid expansion of the industry, Chevron might well be interested in returning to Sudan, but there is a major obstacle: the U.S. government ban on investment in the country, introduced in 1997, still remains in force.

In the absence of U.S. companies, China has become the key player, and Sudan’s largest foreign investor.

Revenues Wealth to be fairly distributed

PROPERLY handled, Sudan’s oil wealth could as easily be the key to a peaceful and prosperous future as was a contributing factor to the devastating civil conflict. Instead of fueling the division that resulted in decades of civil war, it could transform Sudan into one of the richest countries in Africa.

For that to happen, it has to be clear that Sudan’s oil wealth is being shared fairly. Indeed, this is a basic principle of the comprehensive peace agreement (CPA).

The newly established National Oil Commission is co-chaired by President Al Bashir and the President of the Southern Sudan government. It includes equal numbers of representatives from both the national government and the federal southern government.

Ali Othman Taha, Sudan’s Second Vice President, says, “We have agreed on a formula for sharing the oil proceeds. More importantly, we have agreed on how these proceeds can be used to improve the lives of the people.

“We are determined to employ whatever resources we have—including oil—in helping the displaced return to their homes and to equip them with ways and means of improving their livelihood and providing them with opportunities for a better future.”