Investing in South Sudan Oil Could Add Fuel to the Flames

Oct 6, 2019 | Brian Adeba and Megha Swamy
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A major oil and power conference kicks off in Cape Town this week with South Sudan expected to actively seek companies and announce exploration licences to boost its domestic oil production. Investors interested in South Sudan’s oil need to confront a stark reality: oil has fuelled a horrific war for the last five years and counting. Competition for control of natural resource revenues between politicians plunged the country into a devastating civil war in December 2013, just two years after South Sudan’s independence. A 2015 African Union report on the root causes of the conflict and reports by the UN panel of experts, identified oil as a major driver of conflict in the country. At the height of the civil war, government and rebel forces engaged in a series of military offensives to control the oilfields. Oil proceeds are significant for South Sudan, constituting nearly 98% of its total revenue. They could be a major source of development for South Sudan, helping better the lives of millions of South Sudanese. However, ruling elites, enabled by their network of facilitators, have captured the sector for personal gain and used it to unleash violence and misery on civilians.