Background
Introduction
In 1996/1997, there were clear signs that Sudan was working towards peace. Sudan was opening up to foreign investment and the European Union was actively encouraging European businesses to invest in the country. The IMF was working with Sudan on economic reforms and structural adjustment programmes.
It was in this context, and with the upcoming signing of the Khartoum Peace Agreement (KPA) in April 1997, that Lundin entered into an Exploration and Production Sharing Agreement (EPSA). The KPA secured peace between the Government of Sudan and prominent Nuer leaders and southern stakeholders in Unity State, as well as other factions of the SPLM/A. The KPA gave the Company confidence that it would be able to operate in a peaceful and stable environment.
International investment across many sectors including forestry and agricultural development was actively being promoted and sought by the international community as a means of building peace. Lundin entered Block 5A in southern Sudan in 1997. It was one of multiple international oil and global oil services companies present in Sudan in the late 1990s.
The conflicts in southern Sudan
Before South Sudan’s independence in 2011, Sudan was the largest country in Africa and bordered nine other African countries: covering more than 2,500,000 square kilometres with 19 major ethnic groups and over 500 subgroups speaking more than 60 languages and dialects.
It was thinly populated in most rural areas but suffered continually from ecological disasters that caused not only death but also the displacement of people. This led to the movement of people seeking to improve their socio-economic opportunities and basic survival. Increased conflicts for water, grazing land and fishing rights as well as cattle raids, particularly between the major southern ethnic groups, the Dinka and Nuer, were a constant feature in Sudan’s instability. The inter-factional conflicts in the 1990s and the new millennium were responsible for ninety-percent of internally displaced people in southern Sudan.
As well as natural disasters, religion and ethnicity were exploited by elites and foreign actors for their own political agendas. The 1990s saw the issue of secession of southern Sudan framed around conflicts between the ‘Islamic north’ and ‘Christian south’, have increasing resonance to international audiences.
Singular causes of the conflicts in southern Sudan are contested. The factors that are most fiercely debated centre around: the role of political elites, inter and intra-tribal animosities, competition and control of resources such as land and cattle, historic external influences from Egyptian interference to colonial divide and rule policies of the former British Empire, access to weapons, external patronage, militarization of society, and/or leadership.
Conflict may be synonymous with Sudan but alongside exists a continuum of peacebuilding efforts. The international community and Intergovernmental Authority on Drought & Development (IGADD, latterly IGAD) were heavily involved in peace-building efforts between the Government of Sudan and the rebel group, the SPLM/A throughout the 1990s and 2000s. Internal peacebuilding efforts led by the churches and NGOs focused on the inter-factional fighting that had been devastating local communities for decades.
Despite the KPA, the conflicts in southern Sudan bequeathed a widespread shortage of resources, little or poor access to services, and the disruptive presence of armed combatants whose energies swiftly turned from the wider conflict to destructive action within or outside their communities. Refugees from the conflicts, fled into traditionally held territories, increasing competition for resources, fomenting tensions and spawning further violence. There was no effective system of justice that would serve as a deterrent to these activities and the customary laws that had previously held these populations together unravelled.
The prolonged conflicts within and between communities resulted in the destruction of the physical, social, economic, and political infrastructure. Poverty, food insecurity, broken family structures and relationships, greater numbers of Internally Displaced People and, inevitably, death and injury followed. In 1983, there were between 6–7.5 million (statistically uncertain) southern Sudanese, by 2000, 3–4 million remained.
The impact of these perpetual conflicts was felt in the absence of health workers, teachers, transport and even basic commerce. None of these services could be financed except by international aid donors, humanitarian organisations and the churches.
The number of different factions, competing groups and warlords in southern Sudan throughout the 1990s/2000s was staggering and when combined with communal grievances presented a deeply complex landscape covering a vast geographical area. To put the context of this kaleidoscopic conflict into one that holds foreign oil companies as responsible is a clear misrepresentation of the history of Sudan.
Block 5A, Unity State
The extent of Lundin’s involvement in the State’s development of its natural resources was extremely limited. The Company was granted concession rights for Block 5A in collaboration with the Malaysian company Petronas, the Austrian company OMV and the Sudanese state oil company Sudapet. Block 5A lay south of blocks 1, 2 and 4 where discoveries of oil had previously been made. At that time, existence of a petroleum system in Block 5A had yet to be found.
Block 5A was approximately 30,000 sq km of which a third was swampland with significant additional areas of this region being also flooded during the rainy season.
Thar Jath, the site of Lundin’s drilling in Block 5A, as well as the Thar-Jath area were entirely flooded during the rainy season. Before the building of the All Weather Road (an elevated gravel road to avoid flooded areas), the lack of roads in this area limited Lundin’s exploration activities. In the six years the Company was in southern Sudan, it only operated approximately 20% of the time.
In June 1998, the highland camp used for seismic activities, located 75 kilometres south of Bentiu, was overrun by a local group who occupied the camp for a few weeks and caused substantial material damage. Operations resumed at the beginning of 1999. After two years of scouting trips, collecting seismic data, and conducting environmental studies, the Company started exploratory drilling in April 1999 at the rig site Thar Jath in Block 5A. However, just a few weeks later, in May 1999, the Thar Jath rig site was attacked by a local faction and three guards were killed for reasons unknown to this date. All seismic and drilling activities were discontinued.
Drilling recommenced in January 2001. In March 2001, the Company announced that commercial quantities of oil had been discovered and production tested at Thar Jath. An independent reserve study by Resource Investment Strategy Consultants (RISC) of Perth, Australia, later assigned proven and probable recoverable reserves of 149.1 million barrels of oil to the Thar Jath discovery. Two months later, operations were once again shut down, initially due to the onset of the rainy season but over time because it became apparent that the security situation was not stable.
In December 2001, during a brief resumption of operations, a helicopter used for the seismic campaign was shot at by a local armed group that had been refused access to it as they were carrying arms. On 22nd January 2002, the Company announced that as a precautionary measure for security, drilling operations would be temporarily suspended in Block 5A but noted the cease-fire agreement that had been reached on 19th January 2002 made it hopeful it could resume operations. The Company made it clear to the Government of Sudan that it would not return to operations in Block 5A until there was a comprehensive and sustainable peace agreement.
Lundin and the local community
Throughout Lundin’s presence in Block 5A, close ties were maintained with the local population through its substantial Community Development and Humanitarian Assistance Program.
It believed that community engagement was vital to the economic success of the concession and that its investment had a positive impact on the local community. This plain fact contradicts the allegations by certain NGOs of its complicity in alleged war crimes against civilians.
Lundin’s development projects had the sole aim of contributing to the welfare of the local populations, particularly those situated in the concession area. In order to achieve this, it carried out consultations with representatives from the local population, tribal leaders, representatives of the state, the Government of Sudan, and other relevant stakeholder groups to determine key needs. This assessment was developed into a formal Community Development and Humanitarian Assistance Program (CDHAP) in 2001.
CDHAP projects included freshwater supply, the improvement of education facilities, healthcare and capacity building. By way of example, Lundin built and/or supported six schools by the end of 2001 in Kwergen/Dorang, Kwosh, Thar Jath, Koo, Thoan, and Adok, for 585 pupils. A permanent school was constructed in Thoan.
To prevent the spread of communicable diseases such as malaria, diarrhoea and bilharzia, Lundin distributed water, blankets, mosquito nets, tarpaulin, and soap to the local population, sprayed huts and swamps to control mosquitoes, constructed latrines, and facilitated vaccination programmes carried out by health organisations. Between five and eight Sudanese doctors, as well as more than a dozen local paramedical staff were employed by Lundin. They worked in mobile tent clinics, temporary straw clinics, as well as in hospitals in the area. Word spread about these clinics and thousands of patients were treated by Lundin’s medical staff.
In terms of capacity building, Lundin also distributed farm tools and fishing tackle to local entrepreneurs and, in particular, it collaborated closely with an international NGO based in Rubkona, which helped thousands of families in the area with their farming and fishing techniques and provided tools to enable people to cultivate their own land. Lundin also constructed two water filtration units on the Bahr el Ghazal river for the local population to take drinking water to nearby villages.
Constructive engagement
In 1996/1997, there were clear signs that Sudan was working towards peace. Sudan was opening up to foreign investment and the European Union was actively encouraging European businesses to invest in the country. The IMF was working with Sudan on economic reforms and structural adjustment programmes. It was in this context, and with the upcoming signing of the Khartoum Peace Agreement in April 1997, that Lundin entered into an Exploration and Production Sharing Agreement (EPSA). The KPA secured peace between the Government of Sudan and prominent Nuer leaders and southern stakeholders in Unity State, as well as other factions of the SPLM/A. The KPA gave the Company confidence that it would be able to operate in a peaceful and stable environment.
However, the KPA did not hold and there was a resumption of violence in southern Sudan, including in and around Block 5A between the various regional groups and factions and at times between the Government of Sudan and the SPLM/A. It is important to note that distinctions between factions and groups was never ‘neat’ and alliances were fluid and ever-changing. Experts on Sudan recognised that it was difficult to ascertain specific allegiances or objectives of the various factional groups and individuals.
Although Lundin generally refrained from getting involved in the political affairs of a country, Carl Bildt, who was the UN Secretary-General’s Special Envoy for the Balkans from 1999 to 2001 and a member of the Lundin’s Board volunteered to use his vast experience to promote peace in the region. Bildt met with a number of high-level representatives from all sides, as well as representatives of the key nations acting as peace mediators, such as Kenya, Norway, the UK, and the USA. Sweden as a member of the Inter-Governmental Authority on Development (IGAD) Partner’s Forum Support Group for Sudan was also involved in the peace process. During the 1997 peace discussions, Sweden provided significant support including contributions to the IGAD peace fund. Sweden was publicly and actively engaged and directly supported events taking place in Sudan to ensure peace, which provided a clear lead for the Company to follow.
Lundin’s consultations in relation to peace were held with an array of stakeholders, from the Sudanese government, local government, local Nuer communities, the Swedish government, the humanitarian community, the UN Commission on Human Rights, NGOs, think tanks, the media, negotiators, including representatives of southern Sudan, and the local government of Unity State. Lundin also maintained a dialogue with the Swedish Authorities as to their operations in Sudan and continued that dialogue when criticism of their presence entered into the media in 2001. At no stage did the Swedish Government advise, direct or otherwise intervene to halt Lundin’s exploration and appraisal activities. Neither the UN nor the Swedish Government in the spring of 2001 made any requests or demands that Lundin cease its activities in Sudan.
From the end of 2001, Lundin suspended operations and made their resumption conditional on a permanent peace agreement. After this point, it did however maintain its community and humanitarian programmes, until it sold its interest in the Block in 2003.