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North and South Sudan: The biggest game of poker in the modern world

This is a guest post by Johnny West, a social entrepreneur and writer with 20 years professional experience in and around the oil industry. He began covering energy markets as a Reuters correspondent in the Middle East in the early 1990s. In 2010 Johnny founded Open Oil,  an energy consultancy and publishing house based in Berlin. He is also the author of Karama! Journeys through the Arab Spring .

Here, following a two week trip to North and South Sudan, Johnny West discusses South Sudan’s decision to shut down oil production.

The facts are simple but brutal: in response to a dispute over pipeline fees, the world's newest country South Sudan stopped producing oil in February because the only way to take it to market was through the pipeline to the north, through Sudan, the country they had just seceded from.

Then there's the interpretation of the known facts, which can be as deep and technical as you want: which of the two government positions, Juba and Khartoum, is closest to any kind of international norm? How come the sums the North demands for transport, $36 per barrel, magically equal the amount of money it was getting before the South's independence, when half the oil produced in the south still belonged to it? Did anyone in Juba take advice on how one closes down an operating field, and how long it would take to restart production if there was ever an agreement reached? How do the fees compare to other transnational pipelines, and what is the truth behind the stories of billions of dollars of oil physically lifted, inside Sudan for local consumption and then at Port Sudan by some unholy alliance of officials and black market traders who – make no mistake about this – have connections which ultimately lead to a petrol station near you.

But behind the facts and the speculation about the facts, a two week trip to both countries has left me with an unnerving and perhaps unanswerable question: what if the shutdown of oil production in Sudan, and the resulting economic crises in both countries is the biggest game of poker in modern history. What if its win or bust with 40 million livelihoods, a game consciously played by decision makers used to  staking other people's lives?

...read the rest of the article here.

SEC schedules vote for Dodd-Frank extractive transparency provision

The SEC has announced that it will vote on the long-delayed extractive transparency provision of Dodd-Frank (Section 1504) on 22nd August 2012. Section 1504 - also known as the Cardin-Lugar amendment -  will oblige all US listed extractive companies to publish their payments on a country by country and project by project level to the countries in which they operate.

This vote – and these rules - have been a long time coming; delayed on more than one occasion, the rules were legally due to be published back in April 2011. The announcement of this vote represents a victory for US civil society groups, who tirelessly campaigned for the publication of these rules. PWYP USA members organised activities ranging from valentine theme stunts, advocacy letters, to being forced to take legal action against the SEC for being over a year late with the rules.

On June 27th, Senators Lugar and Cardin wrote to Jon Rymer, the SEC’s internal watchdog, asking him to evaluate the implementation of the rules. A few days previously, 58 Members of Congress - Democrats and Republicans - wrote to the SEC calling for the immediate release of the rules governing Dodd-Frank provision 1502 and 1504.

Congratulations again to all our colleagues in the US for their fantastic work. We are all looking forward to the vote!

Read PWYP USA's press release: Vote Set for Long Overdue SEC Oil and Mining Transparency Rules

Tearfund campaigners call on Cyprus to unearth the truth

Picture Credit: Andy Wilson/Tearfund

On 3rd July Tearfund campaigners gathered outside a photo exhibition at Europe House in London inaugurating the start of Cyprus' Presidency of the European Union. 

Clad as miners and holding framed images - to help picture the potential of transparency - campaigners handed out dove shaped flyers. The flyers were to explain the importance of the EU's upcoming transparency legislation. And the dove shapes? Not only a symbol of peace but also the national symbol of Cyprus.

As Tearfund's press release highlights: "Cyprus, in its role of President of the European Union, has responsibility for steering the negotiations on EU transparency laws. Tearfund has written to the Cypriot High commissioner in London, urging his government to do all it can to ensure European leaders champion transparency and unearth the truth on corruption."

Here's hoping for a successful Cypriot presidency of the EU! Although it comes at a difficult time it could also preside over some groundbreaking legislation which could help lift millions out of poverty and not cost European tax payers a penny in these austere times.

Read Tearfund's press release.

Tearfund have also written great blog on this - read "Cyprus, help bring truth into focus".




The EITI Board comes to Lima

Peru’s capital Lima hosted the 20th EITI Board meeting on 27 and 28 June 2012. While few concrete decisions were made at the meeting – the most significant being the admittance of Solomon Islands as an EITI Candidate country – the emphasis at this meeting was a discussion of strategic options as the EITI International Board considers a move to adopting a new Global Standard.

The EITI Strategy discussions have focused on the following loose objectives: decide what new elements should be mandatory EITI requirements; design a mechanism to formally encourage and recognize innovative practices; and install a new validation system to assess performance and determine compliance. In Lima these issues were discussed at length and PWYP will continue to canvass opinions and campaign for an EITI which remains fit for purpose and is not stuck in the past.

As has become the tradition, a myriad of associated events and side-meetings accompanied the board meeting proper. These ranged from a visit to a large copper mine near Arequipa city – all the more pertinent given recent protests over mining in Peru; a civil society meeting between members of the PWYP network and RLIE (Red Latinoamericana sobre Industrias Extractivas) looking at sharing experiences and potential joint advocacy opportunities; and a high level event “Open government and transparency in the extractive industries in Latin America and the Caribbean” which included opening remarks, amongst others, by President Ollanta Humala and an intervention by our own International Director, Marinke van Riet, on “Experience in contract transparency and monitoring”.

PWYP-Uganda hosts roundtable with EITI Chair Clare Short

On the 7th of June 2012, Global Rights Alert  - in Conjunction with Publish What You Pay Uganda (PWYP-U) hosted a roundtable to discuss EITI and its adoption in Uganda.

EITI Chair Clare Short participated, along with her colleague, Jürgen Reitmaier, the EITI Special Regional Advisor. In attendance were over 30 representatives from civil society, media and development partners. Ms. Short’s visit was part of the broader advocacy campaign for Uganda to adopt and implement the EITI.

PWYP-U chair, Ms. Winfred Ngabiirwe, informed the meeting that despite Uganda’s Oil and Gas policy of 2008, and expressed interest in joining EITI, the Ugandan government has been slow to match action to rhetoric. Ms. Short called on the government to commit Uganda to implement the EITI standard. She emphasized that the transparent management of oil wealth was essential for the building of the country and to ensure that all the Ugandan people receive the benefits to which they are entitled. She added that Uganda must take the opportunity to start EITI from the beginning. Since no production revenues have started flowing, the country has the opportunity to avoid the entrenchment of poor policies in the oil sector by signing on to EITI before production starts. Responding to concerns from the participants on whether it was essential that the country have EITI provisions in the country’s legislation, Ms. Short informed the group that legislation, while a good initiative, was not a prerequisite for implementation. Ms. Short concluded by saying that EITI is not a cure-all but a tool to contribute to transparency and accountability. Its implementation alone will not prevent the resource curse but it will act as an international spotlight on a government’s dealings with the oil industry, as well as a tool to inform the public and inform civil society’s demands for transparency and accountability.

Many thanks to Winnie Ngabiirwe for sending this article in.

Visit our site to read a longer report about this roundtable and EITI in Uganda.

Ugandan government discloses contracts

In other Ugandan news, the government disclosed to parliamentarians product sharing agreements it had signed with Tullow Uganda, China’s National Oil Corporation (CNOOC Uganda), Total E&P Uganda Dominion Petroleum and Neptune Petroleum.

Secrecy surrounding the details of these agreements had fostered suspicion that Ugandan citizens had received a ‘raw deal’ for their resources. However, when the deals were disclosed it emerged that after oil companies have recovered their costs, Ugandan citizens will still receive 74% of the oil benefits if channeled sensibly from government coffers.

Uganda’s foray into petroleum production was mired in controversy last year when Tullow Oil were accused of having bribed three key officials, claims which it later turned out had been fabricated.

While more of the particulars of the deals need to be assessed, this episode illustrates how hiding the truth will cause people to imagine the worst; while transparency can benefit governments and companies alike!


Thank you to one of our readers for pointing out that Mauritania - not Tunisia - was the first Maghreb country to join EITI in 2007, and indeed became compliant in 2012. 

Merci à un de nos lecteurs d'avoir éclairé que la Mauritanie, plutôt que la Tunisie, a été le premier pays du Maghreb à se joindre à l'ITIE et est en effet devenu conforme en 2012.