Chevron and Nimeiri

Chevron and Nimeiri
Oil exploration - a brief history
Oil exploration in Sudan started in 1959, when Italy's Agip oil company was granted concessions in the Red Sea area, carrying out seismic surveys and drilling six wells. Following Agip into the Red Sea came Oceanic Oil Company, France's Total, Texas Eastern, Union Texas and Chevron. All yielded nothing for the next fifteen years.
The only successful results were achieved by Chevron in 1974, 120 km southeast of Port Sudan, where dry gas and gas condensate were found at Basha'ir-1 and Suakin-1 wells. Chevron estimated possible production of 50m cubic feet of dry gas and one thousand barrels of gas condensate per day. No oil was found, however, and most companies relinquished their concessions in the region. Since 1991 the main holder of the Red Sea concession has been IPC (International Petroleum Corporation, now part of the Swedish Lundin group).
Exploration for oil in southern and southwestern Sudan began in 1975, when the government of Sudan granted Chevron a concession area of 516,000km2 in blocks around Muglad and Melut. Chevron started geological and geophysical surveys in 1976, and drilled its first well in 1977, which was dry. In 1979, Chevron made its first oil discovery in Abu Jabra #1, west of Muglad, where an 8 million barrels reserve and a 1,000 barrels per day (b/d) production rate were estimated.
Unity field
Chevron's most significant discovery was made in 1980 in the Unity/Talih oilfield, north of Bentiu in Western Upper Nile.
However, when Chevron first started exploring for oil, it was in areas designated by Nimeiri's central government, and these initially excluded southern Sudan, according to Abel Alier, the Southern Sudanese judge who was Nimeiri's vice president:
"Chevron didn't find what it wanted, and then the southern Sudanese asked if Chevron could extend its work to the south. The company also asked the central government if it could work in the south, but it found a solid wall against this. Since the government in southern Sudan was interested, we made it possible for Chevron to come to the South. I was president of the Southern Regional Executive Council at the time."
The first director of Chevron in Sudan maintained good relations with both the southern regional government and the central government, and the company was at first more concerned about sharing the oil revenue with the region than was Nimeiri's central government. Later, however, a "second Chevron group cut relations with us [the southern Sudanese] and treated us with less respect," according to Alier.
In the end the oil company entered into an unpublicised contract with the Nimeiri government to explore the Hofrat Nahas area of the south, with a production-sharing formula with the central government alone.
Heglig field
Heglig field, which lies 70 km north of Unity field, just inside Southern Kordofan, was discovered in 1982.
Six appraisal wells were drilled in Heglig, showing an estimated reserve of 265 million barrels, with a production output of 2,000 b/d. By 1982, Chevron had drilled 22 discovery, appraisal and production wells. Chevron estimated a total oil reserve of 593 million barrels and a production rate of 3,600 b/d.
1980s - CATALYST FOR CONFLICT?
The discovery of oil in Sudan came when the "breadbasket" dream was beginning to fade. It enabled Nimeiri to continue forecasting a brighter tomorrow, while in reality the economy was in a downward spiral. When Chevron began work in Sudan in 1975, Nimeiri amended his 1972 Oil Exploration Act to give his Minister of Energy complete authority to reach agreements with foreign companies.
"Nimeiri's overconfidence and the regime's intensifying economic difficulties led him to seek direct control over the newly discovered oil resources in the south… In 1980, he announced plans to redraw the borders between southern and northern provinces. When this proposal was blocked by the regional government, he conveniently created a new province [al-Wihda, or "Unity" State] and removed the oil fields altogether from southern administrative jurisdiction." (Civil War and Failed Efforts for Peace in the Sudan - Taisier Ali and Robert O. Matthews)
Moving the boundaries for "Unity"
In 1980 Nimeiri created "Unity" (al-Wihda) State around Bentiu town with the stated intention to declare it as an asset of both the South and the North. In practice he would "change the oil areas in the south into northern properties by changing the boundaries within the country," according to Abel Alier.
"We had the impression that Chevron was quite comfortable with this idea, but the south's reaction was extremely strong. We objected to changing boundaries, to a different drilling location outside the south, and to the building of a pipeline from the southern fields to Port Sudan. The south preferred that the oil be taken through Mombasa in Kenya [to the Indian Ocean], which we considered a friendlier route."
Chevron played an important part in bolstering US support for Nimeiri, and the high level of American financial and military support may well have been one of the factors that made Nimeiri feel he could afford to provoke the South.
In a flagrant breach of the 1972 Addis Ababa peace agreement, the southern region was "re-divided" into regions, and the central government began sponsoring, organising and arming tribal militias in the south. Urged on by another southern vice president, Gen Joseph Lagu, who opportunistically voiced Equatorian political frustrations, Nimeiri established three regions where there had previously been one (at least theoretically) autonomous southern region.
Redivision particularly antagonised the Dinka, the largest southern tribe, who form the backbone of today's SPLA. The justification was that the state was stricken by economic crisis and unable to carry out its peacekeeping duties. These steps were all in the name of maintaining unity and consolidating national sovereignty - ironic, in view of the divisions they sowed.
Bitter arguments ensued over the siting of a refinery to provide products for domestic consumption. Southern demands for a refinery in the south were turned down in favour of Kosti, in northern Sudan. Although Chevron's technical reports supported the Kosti site, the political impact of the decision and the manner in which it was handled were disastrous.
Under the 1972 Addis Ababa Agreement the Central Government controlled oil exploration and exploitation. But the Southern Regional Government had the right to all governmental profits on exports from the Region, as well as taxes from private businesses located there. Southerners were understandably unhappy about Khartoum’s decision to build the main refinery in the North.
Fear and anger about the Central Government’s apparent intention to get complete control of the oil led to increasing resentment in the South. In March 1983, the tensions were sparked by a mutiny in Bor into renewed civil war, and the rebel Sudan People's Liberation Army (SPLA) was founded by Southern army commanders.
The central government dropped the idea of changing the boundaries, and "Unity" / Wihda State remains part of Western Upper Nile. However, Nimeiri's tactics or misleading boundaries, are echoed in the Arakis Energy Corp maps of Heglig and Unity fields as recently as 1996 (see inside back cover).
Shifting politically to the religious right, Nimeiri embarked on reconciliation initiatives with some of his former opponents. With Sadiq al-Mahdi's Umma party, his success was short-lived, but Dr Hassan al-Turabi and his National Islamic Front accepted. They were seeking to infiltrate the army and other security organisations, and played the role of Nimeiri's loyal servants in order to achieve that purpose. The outcome was the imposition of a harsh and unpopular form of Islamic sharia law in September 1983.
Sharia was the last political card left for Nimeiri to play, and it compounded the popular resistance against him, ironically in the Muslim north as well as in the south.

The Sudan People's Liberation Army (SPLA) began attacks on oil installations almost immediately, as well as on the giant canal project in southern Jonglei, where the French CCI company was operating the world's largest excavator. The canal has never been completed.
Chevron's work came to a halt in February 1984, following an attack by the SPLA, in which three of Chevron's employees were kidnapped on the island base at Rub Kona and later killed. Three weeks before the attack, the Chevron spokesman in Khartoum said he was confident that extensive work doing deals with local chiefs, deploying antropologists and other specialists, had the security question "all sewn up". The company misread the fluidity of Southern politics and the limits of the chiefs' powers in the face of guerrilla activity. It sems Chevron was given absolute assurances which meant nothing when put to the test.


Nimeiri tried to recruit and mobilise a local Nuer militia ("Anya-Nya Two") to help defend the Bentiu area against the largely Dinka SPLA. Chevron was not convinced, and closed down its operations. When it resumed in the late 1980s, however, Chevron itself tried supporting a militia of ethnic Baggara (cattle-herding "Arabised northerners") in an attempt to secure the area.