Oil Revenue Sharing Sample Clauses

Oil Revenue Sharing. The CPA created a system of revenue sharing between the North and the South. Needless to say, oil revenue is a matter of major interest to both sides, but particularly to the South, which gets 98% of its budget from this source. The CPA prescribed that 2% of all revenue would remain in those areas where the crude is extracted, while the rest would be divided equally between the North and the South. Although the oil-wealth sharing agreement led to the flow of about $10billion from the North to South, thus contributing decisively to keeping the peace, its implementation was hindered by both political tensions and lack of administrative capacity.180 In particular, as discussed earlier on power-sharing, the absence of any reliable data about Sudan‟s oil production made it impossible to determine precisely how to divide the oil-generated wealth.181 Institutional delays and lack of transparency over revenues, along with disagreements over demarcation in oil-rich regions, generated considerable distrust between the two sides. Since 2005, inconsistencies in reporting between oil companies and the ministry of Finance and the National Economy raised doubts about the willingness of the North to share fairly oil revenues with the South.182 The government in Juba also speculated about the existence of the off-the- record deals between oil companies and Khartoum aimed at lowering the official amount of oil extraction. This was one of the key reasons for the South‟s temporary withdrawal from the power-sharing arrangements in 2007. Although land and water conflicts affect a considerable number of both Northern and Southern Sudanese citizens, oil-sharing has remained the crucial issue in the relationship between the North and the South and has remained contentious to date. Majority of the oil fields, generating about 85% of the total oil production, is found in the South, which, however, is a land-locked region still dependent on the pipeline running from Southern Sudan to Port Sudan for export. Indeed according to Garang B: The CPA never addressed the issue of oil comprehensively. Nothing other than oil has been the bone of contention ever since, some mechanisms should have been put 180 Xxxxxxx, Xxxxxxx., Op. cit., p.5. 181 Global Witness. (2009): Fuelling Mistrust: The Need for Transparency in Sudan‟s oil Industry; London, Global Witness, September. 182 Global Witness (2009), Op. cit. in place to avoid future conflicts. Oil is the greatest threat to peace; the north want...