Contributor's Opinion

Opinion: S. Sudan oil industry transformation is failing unless there is a reform in the ministry of petroleum and Nile Petroleum Corporation

By Gabriel Matut Maliah.

A Sudanese engineer points at the damage to an oil pipeline in a largely damaged oilfield in Heglig April 23, 2012. REUTERS photo
A Sudanese engineer points at the damage to an oil pipeline in a largely damaged oilfield in Heglig April 23, 2012. REUTERS photo

August 14, 2020 (Nyamilepedia) – Change hurts. It makes people insecure, confused, and angry. People want things to be the same as they’ve always been because that makes life easier. But, if you’re a leader, you can’t let your people hang on to the past.”  – Richard Marcinko

The quest for genuine reforms in the country’s oil industry has taken longer than expected for the industry to engage itself into technological upgrading and innovation in upstream petroleum, globalization of the petroleum industry and suppliers’ experiences of entering foreign markets, diversification into and out of petroleum – and the potential for new growth paths after oil to enhance its operations locally before entering into global markets.

The petroleum sector is South Sudan’s most important industry in terms  of added value, country revenues, export value, capital investments as well as  the main engines of the country’s economy since independence , 9 July 2011.

If we don’t invest in the growth potential and reforms of this sector, South Sudan will never experience the economic growth the citizens want for this beloved country and the little the citizens get from the mercy of the investors, will go into individuals pockets and the rest is a history.

However, the Ministry of Petroleum’s (MOP) current crisis is a systemic failure in implementation of its human resource policies, agreements with operators like Petronas of Malaysia, China National Petroleum Corporation (CNPC) and ONGC of India, and low institutional capacity and lack of technical capacities are the barriers to the transformation of the sector, extending to Nile Petroleum Corporation and across all the joint operating companies in the country namely, Dar Petroleum Operating Company (DPOC), Greater Pioneer Operating Company (GPOC) and SUUD Petroleum Operating Company (SPOC).

In term of main challenges for industrial transformation in the country, we have found that the Ministry of Petroleum’s leadership is major hurdle in transforming the South Sudan’s economy today and in the future. For instance, South Sudanization policy has not been implemented as it is being resisted by operating companies in the country and this should help the country in saving huge costs that go to expatriates annually. However, social, cultural and political instability since 2012 – 2020 are more difficult to change and represent another major challenges for the sector transformation and if not handled well, will be another obstacle for the industry transformation for the next decades.

Worryingly, the challenges that the oil industry in South Sudan has been facing right after the independence has  now reached deplorable  levels, with National employees grievances from Dar Petroleum Operating Company (DPOC), Greater Pioneer Operating Company (GPOC) and SUUD Petroleum Operating Company (SPOC) followed by several industrial actions because of selective implementation of the provisions of Unified Human Resource Policy Manual adopted from Sudan and lack of unified South Sudan Human Resource policy that should govern all the three joints operating companies.

If Ministry of Petroleum is to recover from its current state of affairs, it should take decisive action by implementing all the agreements reached since 2012 with its investors, enforce Unified Human Resource Policy Manual, including the provisions of Petroleum Act 2012, Petroleum Revenue Management Act 2013 as well as effecting the shareholders’ agreements of its investors with Nile Petroleum Corporation. For instance, the issue of Nile Pet tariff would have been resolved long time ago together with the rest of partners’ tariffs if there were fair implementation of such agreements, and this would have been possible with the support from the Ministry of Petroleum under the overall leadership of former Minister of Petroleum, Hon. Stephen Dhieu Dau.

Similarly, if we Reflect back to Nile Petroleum Corporation’s personnel secondment plan and strategy since the period of former Managing Director, Eng. Paul Adong, up to the current Managing Director, Dr. Chol Deng, to three sisterly joint operating companies namely, DPOC,GPOC and SPOC, the only conclusion is that there were/are no policy in place for  secondment from one company to another, given the fact that there are some managers who are still in the same company since their deployment in 2012 or 2013 when their counterparts in Petronas, CNPC and ONGC were changed several times. It is worth mentioning that the appointment of some Nile Pet secondees was not based on academic merits and this has badly affected the reputation and strategic plan of Nile Petroleum Corporation given the incompetence of some of its staffs.

Nile Pet’s top leadership should know that, successful companies globally depend more on skilled manpower with advanced technological capabilities to compete in many international petroleum markets. The market opportunities available in different international markets are dependent on the technological standards chosen in different petroleum regions and this would not be possible with the current tribal and interest groups employment in the national company and secondment to oil companies.

In conclusion, the petroleum industry worldwide as the largest industry is changing rapidly in terms of innovation models and advanced technologies, and these are possible through good corporate governance. Therefore, the Ministry of Petroleum and the Presidency need to work together to make sure the industry is transformed at the shortest time possible to catch up with the rest of the world in terms of sustainable development and growth brought about by the development of this sector. The leadership of Ministry of Petroleum in collaboration with the Nile Petroleum Corporation need to prioritize unbiased human resource development in terms of scheduled intensive trainings and awarding of tertiary scholarships abroad to speed up the sector transformation efforts, and the nation-building.

Regrettably, most of the South Sudanese nationals in the Oil and Gas Industry with the exception of Minister of Petroleum, Undersecretary of the Ministry, Director General of Petroleum Authority as well as Managing Director of Nile Petroleum, are not being valued by our international investors in the Petroleum industry and this is one of the issues that require immediate attentions from the Ministry of Petroleum. Nationals rights as stipulated in Unified Human Resource Policy Manual are being denied and others like corporate social responsibilities are being under-budgeted compare to others in the region and the world. This is an insult to the sovereignty of this country and its civil population, as this is not what is known as Shareholder value thinking, which is a profit maximization concept.

All the business policies like Petroleum Act 2012, Petroleum Revenue Management Act 2013, Exploration & Production Sharing Agreement and shareholders’ agreements as well as other related policies are written in ways every investor get its shares of the cake without victimizing innocents whether intentionally or unintentionally and this is why leadership of Ministry of Petroleum and Nile Petroleum Corporation should start reforming themselves before reforming the whole industry or they be reformed by the country leadership through the voices of the concerned citizens and other well-wishers. it is therefore worth emphasizing that Well-designed corporate governance structures characterized by strong emphasis on transparency and accountability are keys determinant factors of success in the management of this wealthy sector.

The Author is an Employee Relations Secretary, Workers Trade Union of Petroleum and Mining GPOC Sub-office and Corporate Governance Researcher and can be reached via emails: matutmaliah@ymail.com, & gabrielmatutm2025@gmail.com

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