10 - Arakis and the NIF
 CHEVRON LEAVES, SELLING CONCESSIONS AND ASSETS FOR $25m

In 1988 Chevron decided to resume its activities and developed a six-year exploration and drilling programme set to run until 1994. However, seeing the intensification of the civil war that followed the 1989 NIF coup, Chevron quit Sudan in 1990 and relinquished all its concessions. It had spent more than $1billion.

Why pull out?

When Chevron first arrived in Sudan, there was relative peace in the south and the company had political and financial risk guarantees from the US government. It is the contention of some oil sources that by the time it left, Chevron had become very frustrated with the legal system and the manner in which business was conducted in Sudan. Their contract with the government was less favourable than the one later obtained by Arakis/State, and they appear to have come to the realization that their investment was greater than the extractable amount of oil would justify in the long run.

The tax breaks offered by the US government enabled them to cover their losses, and they seem not to have fought very hard to keep their oil concessions, even though they knew other companies were prepared to move in. Oil prices were falling, too, and threatened to fall below the cost of extracting Sudan's oil.

The Concorp-State-Arakis connection

All the Chevron concessions, ground facilities and machinery were bought - for a token $25million, a tiny fraction of their value - by Concorp, a Sudanese construction company owned by Muhammad Abdallah Jar al-Nabi, an NIF businessman, known for his activities in Uganda during Idi Amin's rule.

It was later revealed that Jar al-Nabi had acted as an agent for the newly-formed Canadian State Petroleum Company, owned by the Pakistani businessman Lutfur Rahman Khan. Jar al-Nabi is said to be related to former Energy and Mining Minister Abdel Wahab, and close to Hassan Turabi, leader of the NIF.

 EAST OF THE RIVER NILE - Block 3

Chevron made moderate discoveries in Melut (Block 3), east of the river Nile, when the Adar-Yale oil field was found in the Khor Adar valley in 1981. Four exploration wells were drilled in Block 3 and showed good flow rates in excess of 1,500 b/d.

After Chevron's departure, the Adar-Yale oil field concession was awarded to Gulf Petroleum Corporation-Sudan (GPC), which is a private consortium of the Qatari Gulf Petroleum Corporation (60%), the previously-unknown Sudanese National Petroleum Company (20%), and 20% Concorp International - owned by the Islamist NIF financier M.A. Jar al-Nabi.

The GPC consortium, chaired by Abdel Aziz al-Dulaimi, reportedly invested $12m in Adar-Yale. It began producing 5,000 b/d in March 1997 and increased output to 10,000 b/d in 1998. However, it is still thought to be depending heavily on Chevron's discoveries and left-over equipment, and is said by critics to lack the expertise to expand the operation.

Jar al-Nabi has built a private oil refinery in Khartoum, and the consortium is initially ferrying crude oil by barge and steamer from the Adar-Yale oil fields to Kosti. From Kosti, the oil is transported to Khartoum by rail. The consortium is planning to build another pipeline in due course.

The Melut area, to the east of Malakal, Upper Nile, is also part of the war zone. Large numbers of people were killed in 1994 when the Adar-Yale fields were attacked. Although many of the wounded were treated in the military hospital in Omdurman, and it soon became public knowledge, the government suppressed all mention of the incident in the media.

On 13 June 1998 the SPLA claimed to have captured the strategic Blue Nile province town of Mabaan, about 600 km (370 miles) south of Khartoum. The road from Ethiopia branches from there to Melut and Renk. The SPLA capture of Mabaan could open the way to put the SPLA on the eastern banks of the White Nile River and threaten the Sudanese government's barge traffic, which includes oil from the Adar-Yale fields.

Michael George Garang, an SPLA spokesman in Kenya, said, "We are telling the foreign oil companies to get out because we will not honour their agreements with Khartoum." (Chege Mbitiru, Associated Press, 13 June 1998)

In June 1998 the SPLA also captured the town of Ulu, about 150 km south west of the strategic eastern town of Damazin. A lull followed. SPLA sources told the Paris-based Indian Ocean Newsletter (23 May 1998) they intended to hold their fire until the installation over at Heglig oilfield was completed and the laying of the pipeline was well under way, in order to cause maximum damage to equipment and morale when the opportunity arose.

On 29 March 1999 the 13th battalion of the SPLA under Commander Malik Agar, based at Ulu, defeated a government brigade which had been besieging the town of 50,000 inhabitants since January 6, Samson Kwaje, SPLA spokesman in Nairobi, told the BBC.

The government force had been "completely annihilated" and its remnants dispersed, he said, adding that 405 members of the government force had been killed at a loss of 12 killed and 17 wounded to the SPLA. The victory, he said, had now brought the Khor Adar and the Adar-Yale oilfield into range of the SPLA's artillery.

11- Ecology and human rights