Oil Industry Will Not Be the Same Again in South Sudan
By Dr. Ater Yuot Riak (PhD), Juba, South Sudan
Friday, August 20, 2021 (PW) — Oil discovery can present a bright future while at the same time seriously harm the prosperity of the country. Mismanagement of oil revenues generates conflicts, poverty, environmental impact, political instability and puts the security and economy of the country at risk. Such a phenomenon is accompanied by a lack of the rule of law, absence of transparency and accountability, corruption, and kleptocracy. This, in turn, resulted in ignorance of environmental measures, human resource policy manuals, etc. In such a manner, less attention is paid to education, training, health, infrastructure, and human welfare.
At present, China National Petroleum Corporation (CNPC), PETRONAS Malaysia, India’s Oil and Natural Gas Corporation (ONGC), SINOPEC (China), and Tri-Ocean Energy (Egypt) are the major oil producers in South Sudan. NILEPET is the only state-owned company represented in the oil industry. Dar Petroleum Operating Company (DPOC), Greater Pioneer Operating Company (GPOC), and Sudd Operating Company (SPOC) are the consortia of those companies. The biggest share goes to CNPC, followed by PETRONAS and ONGC. However, this share differs from one company to another; for instance, in DPOC, CNPC share stands at (41%), PETRONAS (40%), NILEPET (8%), SINOPEC (6%), and Tri-Ocean Energy (5%).
Manpower in the oil industry is categorized into two: expatriates (foreigners) and nationals. South Sudanese nationals make up the majority of the employees, yet the expatriates remain the dominant workforce. This was due to little capacity that prevented the nationals from participating efficiently. Simply, low investment in training has caused the low capacity of the South Sudanese employees in the oil industry. Poor training was made intentionally to show South Sudanese employees were incompetent and that the expatriates will continue discharging all technical and crucial duties. As a result, South Sudanese remained the least paid employees in all three joint operating companies, namely, DPOC, GPOC, and SPOC.
The oil production and operation in South Sudan is governed by the Exploration and Production Sharing Agreement (EPSA) signed in 2012 and extended in 2018 up to 2027. Then, the agreement should address issues of financial transactions and transparency, environment, local content, and human resource policy manual (HRPM). There have been numerous strikes in the oil fields in Upper Nile State, Unity State, and in Juba, either by oil-producing communities or the national workers. Oil communities demand development projects in terms of schools, health centers, clean water, roads, electricity, and employment opportunities for oil communities’ persons. And to address environmental impacts to humans, land, and animals. National workers are requesting oil companies to implement an updated HRPM that gives them their rights in terms of equal payments, allowances, loans, proper training, and social insurance funds, among others. Unfortunately, all these demands have never come true.
In December 2020, the Ministry of Petroleum (MoP) launched the HRPM 2020 to replace that of Sudan. There are other three documents: Environment Audit, Local Content, and Financial Recovery Audit. Altogether, the documents address issues of oil communities’ development projects and national workers’ grievances. Even national companies interested in bidding with oil companies will be priorities as well. In January 2021, the MoP issued directives to immediately implement the new four documents. Instead, the management of DPOC, GPOC, and SPOC resisted implementing the directives. The partners probably, Chinese and Malaysians, have concerns about the implementation of the new HRPM 2020 and the other related documents.
In March 2021, a delay in response to the MoP directives triggered the national worker in DPOC to go for a strike. They were demanding better pay and the implementation of a new human resource policy. They also want an agreed salary structure, allowances, loans, social insurance fund, and personal income tax. In July 2021, the Council of Ministers approved a new HRPM tabled by the Minister of Petroleum, Hon. Pout Kang Chol. The other three documents Environment Audit, Local Content, and Financial Recovery Audit, are approved as well. Thus, the government has resolved that national employees in the oil sector should be paid equally with their international colleagues. In addition to the rest of three documents, which address the environmental impacts in oil-producing areas, oil communities’ development projects, and national companies working in the oil industry.
On July 15, 2021, the MoP ordered all the oil operating companies to implement the new HRPM 2020 and local content documents. This marked the beginning of the positive of real reform in the oil industry in South Sudan. Now, the HRPM 2022 has become a law, and the Sudan HRPM 2008 is canceled. The reform will not occur with a lack of the rule of law, absence of transparency and accountability in the industry. The implementation of the four documents will guarantee the safe management of the oil revenues and that the public funds are correctly directed to execute the development projects. Now, the dream will come true.
The first phase of the reform has been achieved by making the four documents, HRPM 2020, Environment Audit, Financial Recovery Audit, and the Local Content, mandated to oil operating companies. The second phase is the implementation of these documents, which has already been started by the HRPM 2020 and the Local Content Regulations.
All these achievements were not possible without the tireless support of able Hon. Pout Kang Chol, the minister of petroleum. The government of the Republic of South Sudan, chaired by the Gen, Salva Kiir Mayardit, is highly appreciated for the recognition of the long demands by the national oil workers to reform the industry.
The author, Dr. Ater Yuot Riak Amogpai, is the Secretary-General of the Worker’s Trade Union of Petroleum and Mining in South Sudan, Head of Planning, Department of Projects and Facilities, Dar Petroleum Operating Company, and Member of Academic Staff, Department of Electrical Engineering, University of Juba. Dr. Ater Yuot Riak Amogpai can be reached through Email: ater.amogai@gmail.com/MoB: +211928566661.
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