Overview and Brief History of Sudan
Sudan is located in the continent of Africa, bordered by Egypt in the north, Libya in the northwest, Chad to the west, Central African Republic and Democratic Republic of Congo in the southwest, Uganda in the south, Kenya to the southeast, Ethiopia and Eritrea to the east, and the Red Sea in the northeast. The largest country in Africa, Sudan is larger than Texas and Alaska combined, totaling over 967,490 square miles and has a population of approximately 37 million. Because the borders of Sudan were set by the United Kingdom and Egypt in 1956 with very little regard to the politics/tribes/factions, the borders are constantly in flux, especially in regions where cattle raising is the way of life.
The landscape of Sudan changes drastically as you go from north to south. The northern third of Sudan is part of the Sahara desert region. South of the desert are grasslands and irrigated clay plains. At the very south, close to the Democratic Republic of Congo, the rainfall is plentiful enough to sustain crops and thick forests. The Nile cuts through the country from north to south, splitting into two at the capital, Khartoum. The Blue Nile travels southeast from Khartoum, ending in Ethiopia, while the White Nile continues south into Uganda.
The ethnic makeup of Sudan is a mixed bag. Groups are usually characterized first as being either Muslim or non-Muslim. About two thirds of the population are Muslims. Of this group, the ethnic makeup is a mixed bag: Arabs, Nubians, Jebel Marra, Beja. While Arabs make up the majority, there has been much intermixing. Of the tribes in the south, the Dinka and the Nuer are the two largest, and feature most prominently in the conflict.
About a third of the population are non-Muslim: approximately 5% are Christian; most follow local religions. There is also a very small minority of Jewish refugees, the Falashas. Of these non-Muslims, the majority are African and reside in the southern region of Sudan.
The current leader in power is president Omar al-Bashir, though the real strength of the government lies in his political party, the NIF, the National Islamic Front. Sharia, Islamic law, has been imposed upon the Sudanese people since its original imposition by former president Gaafar Nimeiri in 1983. This has been the source of dissatisfaction among the rebels, the majority of which are non-Muslim.
Gaafar Mohamed el-Nimeiri (Sudan): Former president of Sudan, ruling from 1971 to 1985. Imposed sharia on Sudan in 1983, which still continues today. Was overthrown in 1985.
Omar al Bashir: The current president of Sudan. Initially came into power in a military coup in 1989, and became president when the opposing parties refused to participate in elections.
National Islamic Front (NIF): Currently the political party that in power, supporting the current leader, General Omar al-Bashir. They are considered Islamic fundamentalists.
Historically, Sudan has been in constant warfare since the creation of the country; in addition, it has been embroiled in civil war for over twenty years. The last two decades have been very brutal.
Broken down, Sudan is victim to several conflicts. On a very broad, general scale, Sudan is split by a north vs. south war, firstly as a Muslim (north) / Christian/animist (south) religious conflict, secondly as an Arabic (north) / African (south) ethnic conflict, and thirdly as a tribal conflict. While primarily a non-Muslim African versus Muslim Arabic conflict, other interfering interests have made alliances between various group tenuous at best. With over 300 tribes, just exactly who is fighting whom fluctuates from any given moment; compare the decade of the 90s (primarily a Muslim vs non-Muslim conflict) with the current conflict (2004) in Darfur, a supposedly Muslim district (north vs west).
In addition, relations have been strained by constant famine. Despite Sudan's enormous potential to be a fertile land (particularly near Khartoum and further south), famine has ensued initially due to lack of rainfall, and then exacerbated later by rebel warfare interfering with the farming seasons and the government's application of a scorched earth policy. The addition of refugees fleeing their own countries to enter Sudan has also brought additional problems for the country.
There is also a thriving slave trade that exists in Sudan (and in other African countries to greater and lesser extent); human rights groups have protested against it in various ways, including buying slaves to take off the market (at approximately US $50 per slave, much higher than the average price), a tactic that some Christian groups have attempted to reduce the problem.
Talisman Energy in Sudan, 1998 - 2003
Oil companies first became involved with Sudan in 1979, when Chevron Overseas Petroleum discovered oil deposits. In February of 1984, a guerilla attack killed 3 Chevron employees near the town of Bentiu, causing Chevron to pull out of Sudan. Shortly after, Chevron sold part of its assets to another oil company, Arakis, in 1992. In 1992, Chevron sold its concessions to Concorp International, a Sudanese company, who then sold it back to the Sudanese government. In 1993, Lutfur Khan, a Canadian businessman and owner of State Petroleum Corp, through negotiations with the Sudanese government, acquired the Heglig state and Unity state oil fields in Sudan and then sold State Petroleum to Arakis Energy Corp, who was then controlled by Terry Alexander (who, incidentally, got indicted several years later for questionable business practices).
Chevron Overseas Petroleum: An oil company headquartered in California.
Arakis Energy Co.: A relatively small Canadian company, its assets are traded on the Vancouver Stock exchange. The company was directly responsible for bringing the other members of the GNPOC into the partnership. Sold its assets to Talisman Energy in 1998.
Arakis, like Chevron, suffered from the political climate in Sudan and sought to sell its concessions off as quickly as it could. On August 17, 1998, Talisman Energy (ticker symbol TLM) acquired a 25% stake in the GNPOC from Arakis Energy Corporation (ticker symbol AKSEF), paying $225 - $277 million to acquire the stake. There were three other companies that also share a stake in Sudan: China National Petroleum Corp., Petronas Carigali Overseas Sdn Bhd (Malaysia), and Sudapet Ltd (Sudan).
Talisman Energy: A Canadian oil company with headquarters in Calgary, Alberta (Canada) and headed by Jim Buckee. Largest oil company in Canada. Quite honestly, I find it bizarre that Talisman has been made the scapegoat for all the problems, considering the fair number of players involved, but Talisman is honestly the only party listed that can be reached directly in a tort suit in the United States.
Greater Nile Petroleum Operation Co. (GNPOC): A consortium of the oil companies with a stake in Sudan, jointly owning the largest of the oil fields in southern Sudan and, more importantly, a 1,610 km pipeline to Port Sudan, located by the Red Sea. The GNPOC was, during this time period, made up of: China National Petroleum Corp. (40%); Petronas Carigali Overseas Sdn Bhd (30%); Talisman Energy, Ltd. (25%); and Sudapet Ltd (Sudan) (5%).
Talisman proposed to be a neutral party within Sudan, retaining 40% of the profits from the venture while the Sudanese government retained 60%. In buying the stake, Talisman Energy brought in the ability, in planning, machines, and experience, to finish the pipeline project that both Chevron and Arakis were unable to complete. Charged with the development of the oil fields in Heglig State and Unity State (two states in Sudan), Talisman laid 936 miles of pipeline from the Heglig oil fields to Port Sudan within a year alone. The Sudanese government purportedly aided Talisman Energy in clearing the oilfields through a scorched earth policy, evicting several tribes of their homes and killing those that resisted. Talisman denied that there had been any major relocation of the Sudanese tribes, and paid minimal concessions to the few that were identified needing to be relocated.
"I talked to Talisman in February 1999. They asked if there had been any people displaced by them. I told them about the market that existed before the locals were burned out . . . I told Talisman about the displacement from Heglig and the discontent with the company's operations in Heglig. People are mistreated, not employed, suspected of being a security risk. Our people are not safe there. Our orders are not respected."
Former Governor Taban Deng (before ousted by Paulino Matiep)
"Our feeling is [that] you cannot produce peace and equilibrium by keeping them poor, so we think that the injection of wealth that we bring has to be in the direction of increasing the well-being of the people on average. We're convinced that the government is well-intentioned."
Talisman to Acquire Arakis and its Sudan Oil
On August 20, 1998, Sudan became the target of a U.S. missile strike, aimed at a suspected terrorist site in Khartoum. Despite falling shares, Buckee continued to close the deal with Arakis, claiming, "I believe this project will be good for Talisman and, in time, good for all of the people of Sudan." Approximately 75 employees of Talisman were quartered in Khartoum, Sudan.
Various church groups in Canada protested, protesting at Talisman's headquarters in Calgary, Canada, claiming that Talisman, by investing in Sudan, was also, through the Sudan government, directly funding the genocide by supplying the money for the purchase of weapons. In addition, the completion of the pipe would require land being cleared out, prompting the removal of several villages.
At the end of the fiscal year 1998, shares topped out at $22.95, up from $6.87 in 1992. With the completion of the Sudan oil project, the estimated rate of return for investors was phenomenal: 25%.
The oil fields were given protection by the Sudanese government: Riek Machar and his army, the South Sudan Defense Forces (SSDF). During this time period, he defended the pipeline from the attacks of the warlord Paulino Matiep, who desired to wrest control of the oil fields. However, Machar's growing dissatisfaction with the Sudanese government's inability to keep up their side of the bargain and former ties to the southern rebels made the alliance very fragile. In addition, Riek Machar directly disputed Talisman's comments about the inhabitability of Heglig, stating that airstrip was the site of a former Dinka village: "Anybody who tells you the area is not habitable is only dragging you to the war, as your predecessor the Chevron was in 1985."
Colonal John Garang de Mabior (SPLA): A Dinka, Garang de Mabior is the Commander-in-chief of the Sudan People's Liberation Army (SPLA). Obtaining a Ph.D from Iowa State University (United States) in agronomy, Mabior formed the SPLM in Ethiopia in 1983, when sharia was first imposed on Sudan. Believes in a united, secular Sudan, and, despite having general support abroad, has garnered much criticism for some of his tactics.
Sudan People's Liberation Army (SPLA)/Sudan People's Liberation Movement (SPLM): Formed in 1983 when former President, Gaafar Nimeiri, declared sharia in Sudan. Made up of animist and Christian Africans of southern Sudan, the rebel army seeks a unified, secular Sudan, believing it to be the only way to resolve the conflict. The army is headquartered in Rumbek, Bahr El Ghazal, located in southern Sudan.
Ethnic rivalries have prevented any serious alliances between the various rebel factions; the traditional warfare between the Dinka and the Nuer have escalated into outright slaughter.
"[T]he anarchy in production, the separatist tendencies in the various regions of our beloved country, the moral decay and all the ills that I have enumerated can only be solved within the context of a united Sudan under a socialist system that affords democratic and human rights to all nationalities and guarantees freedom to all religions, beliefs, and outlooks."
John Garang de Mabior
Riek Machar Teny Dhurgon (SSDF): A Nuer (south), Machar received a Ph.D in mechanical engineering from Bradford University (England) and was one of the leaders SPLM from 1984-1991. Following an unsuccessful coup attempt in 1991 where he attempted to wrest control of the SPLM from John Garang, Machar broke away from the SPLM to form the South Sudanese Independence Movement (SSIM) from 1991 to 1997, and despite being considered a rebel, received government funds in Machar's war against Garang. In 1997, Machar signed the Khartoum Peace Agreement with the Sudanese government to further the interests of SSIM, signing the treaty and in the process becoming the commander in chief of the newly formed South Sudan Defense Forces (SSDF). Machar was also appointed the president of the Southern States Coordinating Council (SSCC) and was made assistant to President Omar al-Bashir.
During the Talisman's occupation in Sudan, Machar was directly involved with Talisman, defending the oil fields from guerilla attack. The rivalry between Garang and Machar, primarily political, turned into outright bloodshed when both sides played the ethnicity card (Dinka vs. Nuer) against each other. Despite traditional rivalry between the two tribes, the level of bloodshed involved was not traditional (including the slaughter of women and children) and caused some to call it the "conflict of the doctors" (Dr. John Garang and Dr. Riek Machar), an intellectual conflict that had no real meaning to the factions involved.
"Correcting things before we liberated the whole country made much sense. A sick movement cannot liberate people. If the human rights abuses had continued, there would have been no morale among the combatants."
Interview May 5, 2003
South Sudanese Independence Army (SSIA): Formed in 1994 and ending in 1997, it was a rebel army formed by Riek Machar. Its primary point of difference with the Sudan People's Liberation Army is that the SSIA does not seek a unified Sudan, but rather the independence of southern Sudan.
South Sudan Defense Forces (SSDF): Formed in 1997 after the signing of the Khartoum Peace Agreement and led by Riek Machar under the Sudanese government. However, the army was not allied with the NIF, but rather the political party United Democratic Salvation Front (UDSF). The army was based on Khartoum, Juba, and Malakal. After Machar left in 2000, this army was dissolved, only to be reformed again in 2001 as the official name of all pro-government militia forces.
United Democratic Salvation Front (USDF): A political party in Sudan in direct opposition with the NIF.
Paulino Matiep Nhiel (SSUM): A Nuer, like Riek Machar, he and his forces had been nominally part of the SSDF with Machar for a brief time before political differences (the governorship rivalry in the Unity State elections in September 1997) split them apart. In 1998, Matiep formed the South Sudan Unity Army (SSUM) under the watch of the Sudanese government.
South Sudan Unity Army (SSUM): Formed in 1997 by Paulino Matiep and supported by the Sudanese government, the army was based in Mayom, Western Upper Nile, primarily for the protection of the Unity State but also used to harass Riek Machar's army.
Khartoum Peace Agreement: An agreement by six separate rebel forces with the Sudanese government, signed in 1997. An interesting note about these rebel factions in particular is that all six were allied with the government (in secret) for several years before they signed the agreement.
Despite bad blood between the Nuer and the Dinka tribes, in March 1999 a reconciliation conference was held at Wunlit in Bahr El Ghazal. Riek Machar's support of it made the Sudanese government increasingly uneasy with their alliance, and shortly after, the government stepped up to reinforce the protection of the pipeline with their own troops, increasingly aware that Machar's defection was probably only a matter of time. Additional government forces were flown in to the army bases in Heglig, Rubkona, and Bentiu. In a propaganda campaign, Vice President Ali Osman Taha called on young men and women to join the "Manifest Victory" Brigade (Al Fatih al Mubin) to "score a decisive victory by liberating all positions and spreading peace and stability in all parts of Sudan."
On August 30, 1999, Sudan celebrated the first consignment of oil for export to Singapore, where the Shell Transport and Trading Company was planning to refine it. Days before the first consignment, the IMF (International Monetary Fund) also lifted their declaration of noncooperation with Sudan.
"The oil was always here, but . . . it was in the hands of the American company--and the Americans said, 'We do not need this oil at this time. . .' When told to dig it out 'for the benefit of the Sudanese people or we are bidding farewell,' the Americans left."
President Omar al-Bashir
Sudan, Oil, and Human Rights
The National Democratic Alliance protested, claiming that the proceeds were being used to fund a totalitarian regime; in reply, al Bashir attacked the NDA for "not having Sudan at heart."
National Democratic Alliance (NDA): An alliance of all political parties and factions formed in exile, including the SPLA, the Democratic Unionist Party, Sudan Alliance Force, Beja Congress, and, for a brief while, the Umma Party.
On September 19, 1999, a pipeline was hit by an explosion, resulting in an estimated loss of more than 10,000 barrels of crude oil (valued at approximately US $100,000). Specifically, it was a pipeline 50 kilometers east of Atbara, a town in northern Sudan. Officials traced it to the NDA - specifically, the Umma Party faction of the NDA - and then used the attack to malign the NDA and the SPLA: since the money derived from the oil exports were for the people (and not the government), and by attacking the pipeline, the rebels were directly attacking the welfare of the people. Students took to protesting by the oil pipeline, while the government re-asserted their goal of cleaning Sudan out of the rebels and recruiting students into the Popular Defense Force (PDF). After inspection of the pipeline, it was announced that 3,000 additional policemen would be deployed to protect it. A month later in early October, two bomb blasts went off at a petroleum depot and service station, again traced to the Umma Party faction of the NDA.
"We shall not abandon the reconciliation drive but we shall use maximum force to combat terrorism."
Minister of Interior Major General Abdul-Rahim Mohamed Hussein
Sudan's New Oil Era Comes at a Price
At the same time, Jim Buckee of Talisman Energy faced criticism with their involvement in Sudan by shareholders. While re-asserting Talisman's neutrality in the situation in Sudan, he claimed that the Sudanese government was being unfairly maligned: "There's a huge machine generating false things about Sudan and it's very hard to separate fact from fiction." The investment Talisman was pouring into Sudan, he said, was primarily being used on roads and hospitals, in effect helping south Sudan as well as the north. The divestment of Talisman would not achieve a thing; someone else would easily take Talisman's place once they divested, and it wouldn't be likely that they'd care as much about where the money was going to as Talisman did. The claims of genocide and slavery?
"I don't believe accusations of genocide and I also think the accusations of slavery are grossly misrepresented and possibly manipulated."
Talisman Plays with Fire in Sudan
On October 12, 1999, the US Committee for Refugees called for Talisman Energy to divest its stock in Sudan. At the same time the lobbyists issued their press release, the manager of New York City's pension funds, Alan Hevesi, also requested Talisman Energy to use their leverage in Sudan to force the Sudanese government to end the slavery and civil warfare, in contrast to the immediate divestment that the USCR requested.
US Committee for Refugees (USCR): A lobby group in Washington, D.C., comprised of approximately 15 members. With a budget of approximately US $1.2 million, the lobby group has been active for more than 40 years.
While requests for divestment and/or leverage continued in the West, the northern rebel leader of the Sudan Alliance Force, Abdel Aziz Khaled, threatened to continue bombing the pipeline so long as the foreign oil companies continued to maintain oil operations in Sudan with the cooperation of the government. ""If there is no change we will hit the pipeline every week or 10 days," he threatened, professing no interest in controlling the pipeline but merely serving to damage the government's cash flow.
Sudan Alliance Force (SAF): unlike most of the major rebel groups, the SAF is located in the north.
The government continued to assert that the use of the profits for the building of roads, schools, and irrigation projects, well aware of Riek Machar's outspoken declaration against the government should they fail to uphold their side of the bargain and buy weapons in the war against the south. "I would not be a party to it," Machar said. "The war cannot be won."
Concerned with the accusations being hurled at Talisman, the Canadian Foreign Affairs Department summoned the Talisman executives to discuss their activity in Sudan, desiring Talisman to play peacemaking role with the Sudanese government. The former Canadian Foreign Minister Lloyd Axworthy announced on October 26, 1999, that the Canadian government would consider applying sanctions against Talisman if the oil industry was found to be "exacerbating" Sudan's violations of human rights in its civil war, and proposed to meet with Talisman a week after the announcement.
"If it becomes evident that oil extraction is exacerbating the conflict in Sudan, or resulting in violations of human rights or humanitarian law, the government of Canada may consider, if required, economic and trade restrictions such as are authorized by the Export and Import Permits Act, the Special Economic Measures Act, or other instruments."
Lloyd Axworthy, Foreign Affairs minister of Canada
Talisman Shaken as Ottawa Talks Sanctions
Talisman downplayed the potential consequences. "We believe Canada's limited diplomatic links with Sudan have hampered a true understanding of the real human tragedy, the civil war and the tribal dynamics of the South," said Jim Buckee.
Arranging a meeting with Talisman the week after the announcement, Foreign Minister Axworthy desired for Talisman to play a more active peacemaking role in Sudan, specifically:
- implementing a government-endorsed role code of ethics for Canadian companies abroad (including a pledge to respect human rights, implementing the International Code of Ethics for Canadian Business);
- encouraging publicly the Sudanese regime to invite "independent experts" to investigate the human-rights situation in oil regions;
- launching discussions to verify that the money acquired by the government was, indeed, going into the humanitarian development projects and not to the military;
- urging the Sudanese government to put more effort into the peace process.
With this in mind, Axworthy named Senator Lois Wilson as Canada's envoy for the peace talks, additionally inviting foreign minister Mustafa Osman Ismail and John Garang (SPLA) for direct meetings. The former U.S. Secretary of State, Madeleine Albright, announced her intentions to bring up Talisman's operations in Sudan to the Canadian government, saying, "Other countries are engaged in what they're calling a critical dialogue and are looking at ways to help [the Sudanese] expand their oil drilling. We're going to have to talk to some of our allies about ways to put pressure on Khartoum ... I'm definitely going to discuss this with the Canadians."
In October 1999, the United Nations released a report about the destruction of several villages on the eastern edge of Heglig, where one Talisman oilfield is located. It was reported that the Sudanese army attacked and burned the villages to the ground, displacing 1,000-2,000 civilians. Additionally, Minister Lloyd Axworthy appointed John Harker, an Ottawa consultant, as the special envoy to investigate the allegations of abuse on the Sudan government's part against its civilians.
The first round of talks between the Canadian government and Talisman Energy did not occur until November 1999. Ultimately, Talisman refused to stop operation in Sudan and sanctions were not imposed. Several oil and gas experts from Canada and the United States visited Heglig shortly after in order to examine the project first hand; at the same time, the U.S. criticized Canada's handling of the situation, concerned with "Talisman's investments in Sudan's oil sector buttress[ing] the Sudanese regime's efforts to continue its vicious war in the south of Sudan." By then, several groups dumped their shares of Talisman, including the Texas Teachers Retirement Fund (100,000 shares) and Manning & Napier Advisors, Inc. (over 1 million shares).
While the talks were proceeding, in-fighting broke out in the state of Unity on November 10th between the government and the rebels. On November 10th, the government troops fired on the SSDF without provocation in Rubkona near Bentiu, the capital of Unity State. The SSDF retaliated, ambushing the troops in Fanjak on November 12th. In the process, approximately 300 government troops were killed. The SPLA, in addition, made threats if Talisman continued to stay in Sudan, claiming no responsibility about the welfare of Talisman's workers on the oil fields.
On November 28, the pipeline was holed in an attack near Erkowit, 120 km southwest of Port Sudan. Two meters of the pipeline were destroyed in the attack.
Criticizing the Sudanese government for not being serious for a peace settlement, the U.S government made a direct move. In November 1999, former president Bill Clinton passed a law that would allow the United States to provide food aid directly to the SPLA, despite misgivings about SPLA's actions.
Early in December 1999, the SPLA launched an all out attack against the pipeline. A third pension fund, TIAA-CREF, a college teacher's pension fund located in New York, also dumped their shares of Talisman. Bowing to the sentiment abroad, Talisman Energy formally adopted a code of ethics for Canadian businesses operating abroad, derived from the International Code of Ethics for Canadian Business. The move did not satisfy most groups, particularly Amnesty International. In addition to adopting the code of ethics, Talisman reluctantly considered a potential sale of their project share in Sudan.
On January 16, 2000, a bomb ruptured approximately 10 feet of pipeline about 150 kilometers southwest of Port Sudan. This time, the government blamed another faction under the NDA, the Beja Congress. On May 1, 2000, the oil export pipeline was blown up again not more than fifty meters from the original bombing site of the January attack.
In November 2001, Talisman Energy, along with the government of Sudan, were named defendants in a class action complaint by Sudan refugees who claimed asylum in the United States.
In 2002, Talisman sold its holdings to an Indian oil company, ONGC Videsh Ltd.