South Sudan oil shutdown leads to massive job lossesBy MACHEL AMOS in Juba | Thursday, March 1  2012 at  09:17

For Mr Gatwec Lul, this year simply started on the wrong footing.

Three days after a grinding mill he used to supplement his income broke down, he was notified that his job at the oilfields in Unity state had become redundant.

Gatwec, 42, said he worked in Tharjath as a manual labourer, assisting technicians to move equipment; a job that has supported his six-member family since 2006.

With the shutdown in South Sudan's oil production, Gatwec says the future looks bleak. "It will be too difficult. Where can I begin without the job?"

Gatwec stays at Bentiu, the capital of Unity state, where about 40 per cent of South Sudan oil exports were being produced before the shutdown.

He was released alongside more than 100 other Sudanese working in the fields.

"There is nothing for them to do because the shutdown is complete,” said Mr William Garjuang, Unity State’s minister for Environment, referring directly to the oil workers.

Unemployment

"A few remained to take care of companies’ properties,” the minister said.

In Palaug oilfields in Upper Nile state, where oil giant Petrodar holds concessions that were producing over 60 per cent of South Sudan’s oil, James Buoth fears that he could soon be sent packing.

He works as a cleaner in Palaug center. It is from this job that Buoth, 38, raises money to feed his 11–member extended family.

"My worry is there may not work for me in a few days – and I have no papers,” Buoth said.

"It’s my prayer that Sudan agrees with our government. It will also be good if (work on) our pipeline can start quickly so that I keep my work,” he said.

In Palaug, the total man power is 3,000 people, according to the Field Operations manager Bakheit Mahmoud. Out of this, 2,000 work for Petrodar and 1,000 work for associated oil drilling and service companies.

Petrodar employees are shared between Sudan and South Sudan. For the drilling and oil service companies, the workers include different nationalities like Chinese, Malaysians and South Africans.

Most of the South Sudanese workers are “normal labourers” while some are engineers, technicians and operators.

Following the shutdown, a significant number of the employees, both local and foreign are at risk of losing their jobs in Palaug.

Tough decision

But unlike in Unity state, where Sudanese employees have already evacuated, a decision is yet to be made by Petrodar and the government over whether the workers should leave.

"The decision is not for Petrodar. The decision will made jointly by Petrodar and the ministry of Petroleum and Mining -- how to live in the field, give them medication,” Bakheit said.

South Sudan decided to shut down oil production last month, protesting alleged oil theft and diversion by Khartoum at Port Sudan.

Juba says Khartoum has "stolen" oil worth over $815 million since December.

Khartoum admits confiscating the oil, but argues that it was paying itself in kind for previous shipments that it claims South Sudan had not paid.

Letters exchanged between oil companies and South Sudan on one hand and the government of Sudan on the other, show that Juba has been paying transit fees of between $7.4 and $5.5 per barrel.

South Sudanese officials have sought to downplay the risk of losing jobs.

"They should not actually panic that what is happening to my job, how am I going to feed my family,” Ezekiel Lol Gatkuoth, the head of mission to the United States, said.

Budgetary obligation
“We are taking necessary steps to make sure that everybody is well off,” he said, referring to plans to attract investment companies -- which he said would employ locals -- into the country.
Analysts and international diplomats fear that it is a huge challenge for the Africa’s new nation to cope with the aspirations of its people in the absence of oil revenues.

South Sudan relies 98 per cent on revenues generated from oil to meet its budgetary obligations.

The government has offered an alternative means of exporting oil: to construct a pipeline to the Kenyan Port of Lamu and another to Djibuoti to relieve the young economy from dependency on Khartoum.

If building the pipeline does not reach completion soon, the country could face more internal strife, according to Zecharia Manyok Biar, an administration and planning specialist from Abilene Christian University in Texas.

"The risk will be if the pipeline is not built on time, the country could run out of funds and the expectation of the people is going to drop and some other people who are against the government will find ground to convince those who are not happy and this can even lead to civil war,” he said.