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January 9, 2010

Searching for reasons to be cheerful in Sudan

Only the most foolhardy commentator would dare to say anything optimistic about the coming year in Sudan, four months away from highly charged elections and 12 months from an explosive referendum on southern independence.

So here goes — five reasons why Africa’s largest country might just manage to reach January 2011 without a return to catastrophe and bloody civil war, despite the worst predictions of most pundits.

Oil
Often the cause of conflict, oil could end up helping to prevent it in Sudan. The country’s oil industry, as it currently stands, only works when north and south Sudan work together. The south has most of the known oil reserves while the north has all of the infrastructure — from pipelines to refineries to a sea port. Talk of a southern refinery and an alternative pipeline route to the sea via Kenya are currently “pie in the sky”, one diplomat told me.Both sides may choose to fight it out over contested border oilfields after the widely expected “yes” vote for southern independence, thereby disrupting oil flows and scaring off investors. But it would be much more profitable for all concerned to work out a revenue sharing scheme and live side by side as business partners. The south’s government gets up to 98 percent of its revenues from oil sales so would struggle to survive without some kind of deal.

Read the rest on Reuters' Africa blog.

Posted by aheavens at January 9, 2010 5:42 PM