- The Austrian government-controlled oil company OMV has sold its exploration blocks in Southern Sudan after a massive campaign by human rights groups. OMV thus follows other Western oil companies in fleeing the controversial industry in Sudan while Asian companies take over.
OMV, whose largest shareholder is the Austrian government, yesterday suddenly announced it had sold out its shares in the two exploration blocks where it operates in Southern Sudan (5A and 5B). The stakes were sold to India's national oil company, ONGC Videsh, for US$ 115 million, OMV announced.
The Austrian oil company thus becomes the third to pull out of Sudan's controversial oil industry. Human rights organisations have for long been campaigning against investments in oil production in this war-ravaged part of Sudan, which has been plagued by heavy and systematic human rights violations. Oil companies have been accused of financing the Sudanese government's warfare and attacks on civilians.
The last international oil company to pull out from the area was the Canadian group Talisman, which in March this year sold its shares in the same project and a larger Sudanese pipeline project to the same Indian company, OMGC Videsh, for US$ 750 million. Also Talisman had been under heavy attack from local and international human rights groups for years.
Of the smaller, Western oil companies remaining in Southern Sudan, the Swedish Lundin Petroleum AB still retains its 24.5 percent share in Block 5B. The Swedish company however sold its 40.375 percent working interest in Block 5A to Malaysia's Petronas in June this year, and there are widespread speculations Lundin is seeking a good offer for its remaining share in Block 5B.
Oil exploration and production in Sudan - mostly located around the front between Khartoum's government troops and the southern SPLA rebels - has been controversial right from its beginning. Renowned organisations, such as the British Christian Aid, have documented oil-related human rights abuses, such as a systematic government policy of depopulating oil-rich areas. Oil companies therefore have been accused of nurturing human rights abuses.
Further, while most of the Sudanese front is quiet due to a national ceasefire, the strategic oil resource has proven to create new lines of armed conflict. During the peace negotiations, the few areas with ongoing armed conflict have been those close to the oil fields, causing human rights groups to claim that investments in Sudan's oil sector are premature.
Austrian OMV has been one of the companies experiencing heavy pressure from national and international human rights groups to pull out of Sudan or to use its influence to secure improved human rights conditions since the company acquired its shares in the Blocks 5A and 5B in 1997.
An association of different Austrian civil society groups - including Roman Catholic and Protestant groups, World Vision and partly Amnesty International - since 2002 has operated under the name of Sudan Plattform Austria, demanding an Austrian engagement in the human rights situation in Sudan based on their government's economic interest in the country.
After some lobbying, the group earlier this year noted with satisfaction that OMV last year temporarily had closed its operations in Southern Sudan, referring to an "alarming human rights situation" in the region. This had contrasted other temporary closures, officially attributed to the "security situation," the group noticed. On this basis, Sudan Plattform hoped the OMV engagement could be used to pressure the Khartoum government to human rights concessions.
Sudan Plattform therefore has stated its disappointment over OMV's sudden withdrawal from Sudan "due to the unclear human rights situation". OMV was "running away from its responsibilities by selling" its shares, the group claimed. It will be far more difficult to lobby the Indian government for the Austrian ad hoc group.
OMV, in a short press release on the sale, doesn't mention human rights at all. Helmut Langanger of the company notes: "We have reached a good price for our shares in Sudan ... viewed independently from the accelerating peace process in the country." The Austrian investment in Sudan had paid off, the bottom line message was.
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