The referendum scheduled today on the secession of southern Sudan is a historic regional event, with important implications for the abysmal Arab situation. But the referendum is not a sudden or unexpected event. It was stipulated by the Naivasha agreement in 2005, which put an end to a civil war that lasted nearly 22 years between the North and the South, and claimed the lives of thousands of victims, as it was agreed that the people of south Sudan will vote five years later on whether they want to continue living in a united Sudan. The clear answer expected to be revealed by the referendum – as all expectations indicate without exception-, is that the people of the South are on their way to seceding from Khartoum. But the question is: Why this tendency to secede, what are the possible implications for secession, and what role does oil play in all this? We must acknowledge here that it is the poor management of crises by the ruling party in Sudan during the past five years that has led to this critical situation. With regard to the implications, these will begin to gradually appear against the backdrop of the experiences of federal Arab states, as similar attempts for secession by large religious or ethnic minorities in certain Arab countries will be encouraged. This is not to mention that the door will become wide open for foreign meddling (regional and international) in the affairs of the countries of the region. However, concern is not only about the secession of the South from the North, but also about the possibility that the already difficult situation in Sudan might be aggravated, in a way that allows the Yugoslav fragmentation to be repeated in Darfur and Kordofan, after armed crises and local conflicts. What role does oil play in all this? The Sudanese petroleum experience has been characterized by obstacles and delays in the development of this vital industry, as a result of civil wars and pressures by Western NGOs, to deter the companies operating there from continuing to work in Sudan; this is in addition to the embargo imposed as a result of the conflict in Darfur. Oil exploration in Sudan started in 1959 by the Italian group ENI, and then the U.S group Chevron in 1975. However, the latter withdrew from Sudan in 1984 after the Sudan People's Liberation Army murdered three of its employees. Further, the French group Total acquired a concession agreement in 1979; however, Total did not use it, for many reasons. The second phase was marked by political and economic pressure by NGOs on Western oil companies. There were many reasons behind the campaign. First, those behind it attempted to put pressure on Khartoum to end the war with the South before 2005, before pressure shifted because of the conflict in Darfur. Then these pressures were coupled with an embargo imposed by the United States and European countries which banned travel to Sudan, and several other measures. These attempts, however, did not succeed in stopping exploration and drilling for oil in Sudan. Instead, they succeeded in preventing Western companies from operating in Sudan, allowing Chinese companies to hog a large portion of the oil sector in the country, in addition to the Malaysian company Petronas, Indian and Indonesian companies, and several small private Arab companies. The volume of confirmed crude oil reserves in 2010 increased to nearly five billion barrels, while production in the same year jumped to approximately 490 thousand barrels per day, compared to 57 thousand barrels per day in 1999. Oil has indeed contributed in fueling disputes in the country. Despite the fact that the Naivasha agreement stipulated that oil revenues should be equally divided between the North and the South, and despite the fact that the majority of oil production comes from the South, fundamental differences emerged, including the doubts raised by Southern authorities regarding the figures on oil revenues issued by Khartoum. Officials in the South and Sudanese civil society organizations complained about the lack of transparency and not being able to examine the figures. For instance, Khartoum declared that it received 2.9 billion dollars from oil companies in 2009, while southerners suspected that there were discrepancies involving 9 to 26 percent in excess of the declared amount. The Southerners questioned the figures regarding the production of oil fields issued by Khartoum, claiming that they diverge from the numbers published in the annual reports issued by the oil companies. Needless to say, the Naivasha agreement will expire when the referendum results are declared. In case the secessionist movement wins, this means that the South will acquire the overwhelming majority of oil fields, since these fall within its territory, with a small proportion of fields located in the North. In case the secession takes place peacefully, there will be a long list of oil issues and details to be agreed upon by the two parties, including how oil will be exported, especially as South Sudan does not have access to the sea. This means that the export pipeline currently in operation through North Sudan and Khartoum, and which ends in the Port Sudan area on the Red Sea, will still be used. There are other options for the South to export its oil, but through several other countries. This would increase export costs, not to mention the costs of establishing new pipelines. Another question comes to mind here, regarding the transit tariffs for oil exports, and the quantities of oil that the North will request to meet its domestic demand, in addition to the need to reach a new agreement that will enable the South in the foreseeable future to refine its crude oil in the Khartoum refinery, the only refinery in the country. *. Mr. Khadduri is an energy expert
