South Sudan: Govt Demands More Than $3 Billion From Chinese Oil Companies

South Sudan: Govt Demands More Than $3 Billion From Chinese Oil Companies

By Deng Machol

Juba – The Transitional government of South Sudan is demanding more than $3 billion from the Chinese oil companies operating in the oil fields.

It’s an amount it says went missing from the government share.

The demand comes in the wake of an audit that was conducted to review the petroleum agreements signed between the government and the oil companies following a resolution that was passed by the Council of Ministers this year.

The resolution provided for an environmental audit, the $3 billion and equal pay for the staff working for the oil companies.

The government launched an audit of oil sides in February this year to study the environmental impact caused by oil production to safeguard the local communities living around the oil field and the ecosystem after years of financial mismanagement and reports of poor environmental practice by oil companies since the oil was discovered.

Information Minister Michael Makuei revealed the government demands the sum of $ 3,334,762,170, after its was discovered to have been illegally taken by the oil companies from the share due to the government.

“The result of the audit was the one that gave us the report that this amount is missing and should have been paid by the companies to the government. So this is how we got the amount and this is what we want oil companies to refund the amount,” said Makuei in Juba.

The Minister of Petroleum was then directed by the cabinet to immediately implement the result of the environmental audit which is being resisted by the oil companies.

South Sudan Petroleum Act 2012 provides for the protection of the environment by oil companies in the oil production field but this has been ignored by the companies due to failure by the government to follow agreements it signed with the oil companies.

The Chinese oil companies and government are having a row on implement the unified salary structure and the environmental audit in the oil fields.

In June, the government resolved that national employees in the oil sector should be paid equally with their international colleagues. However, the resolution is reported to have been resisted by the oil companies in the country.

Last week, staff working for the oil companies went on strikes, demanded equal pay in the oil companies. They also want an agreed salary structure, allowances, loans, social insurance fund, and personal income tax.

According to the national staff, the unified human resources manual is a tool that will guarantee the rights of the workers and the companies are respected.

The Dar Petroleum Operating Company (DPOC), is a consortium of China National Petroleum Corporation, South Sudan-owned Nile Petroleum Corporation, Malaysia’s PETRONAS, Sinopec, and Tri-Ocean Energy. It mainly operates Block 3 and 7 oil fields in Upper Nile State.

However, Makuei said “The cabinet directed the oil minister to ensure the operationalisation and implementation of the resolution in later and spirit, and that is to make sure the salary structure is unified and that the company accept and pays staff accordingly.

According to government, the Chinese oil companies have also been obstructing the execution of the integrated environmental and working policy.


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