Economy of Sudan
Encyclopedia
Until the second half of 2008, Sudan
's economy boomed on the back of increases in oil production, high oil prices, and large inflows of foreign direct investment. GDP growth registered more than 10% per year in 2006 and 2007. From 1997 to date, Sudan has been working with the IMF to implement macroeconomic reforms, including a managed float of the exchange rate. Sudan began exporting crude oil in the last quarter of 1999. Agricultural production remains important, because it employs 80% of the work force and contributes a third of GDP. The Darfur conflict, the aftermath of two decades of civil war in the south, the lack of basic infrastructure in large areas, and a reliance by much of the population on subsistence agriculture ensure much of the population will remain at or below the poverty line for years despite rapid rises in average per capita income. In January 2007, the government introduced a new currency, the Sudanese Pound, at an initial exchange rate of $1.00 equals 2 Sudanese Pounds.
is buffeted by civil war, political instability, adverse weather, weak world commodity prices, a drop in remittances from abroad, and counterproductive economic policies. The private sector's main areas of activity are agriculture
and trading, with most private industrial investment predating 1980. Agriculture employs 80% of the work force. Industry mainly processes agricultural items. Sluggish economic performance over the past decade, attributable largely to declining annual rainfall, has kept per capita income at low levels. A large foreign debt and huge arrears continue to cause difficulties. In 1990 the IMF took the unusual step of declaring Sudan noncooperative because of its nonpayment of arrears to the Fund. After Sudan backtracked on promised reforms in 1992–93, the IMF threatened to expel Sudan from the Fund. To avoid expulsion, Khartoum
agreed to make token payments on its arrears to the Fund, liberalize exchange rates, and reduce subsidies, measures it has partially implemented. The government's continued prosecution of the civil war and its growing international isolation continued to inhibit growth in the nonagricultural sectors of the economy during 1999. The government has worked with foreign partners to develop the oil sector, and the country is producing just over half a million barrels per day (2007, from Sudan tribune website).
's primary resources are agricultural
, but oil
production and export are taking on greater importance since October 2000. Although the country is trying to diversify its cash crops, cotton
and gum Arabic
remain its major agricultural exports. Grain sorghum
(dura) is the principal food crop, and wheat
is grown for domestic consumption. Sesame seeds and peanut
s are cultivated for domestic consumption and increasingly for export. Livestock
production has vast potential, and many animals, particularly camel
s and sheep
, are exported to Egypt
, Saudi Arabia
, and other Arab
countries. However, Sudan remains a net importer of food. Problems of irrigation
and transportation remain the greatest constraints to a more dynamic agricultural economy.
Mean wages were $1.39 per manhour in 2009.
Until the early 1970s Sudan's agricultural output was mostly dedicated to internal consumption. In 1972 the Sudanese government became more pro-Western, and made plans to export food and cash crop
s. However, commodity prices declined throughout the 1970s causing economic problems for Sudan. At the same time, debt servicing costs, from the money spent mechanizing agriculture, rose. In 1978 the International Monetary Fund
(IMF) negotiated a Structural Adjustment Program with the government. This further promoted the mechanized export agriculture sector. This caused great economic problems for the pastoralists of Sudan.
During the late 1970s and 1980s, the IMF, World Bank, and key donors worked closely to promote reforms to counter the effect of inefficient economic policies and practices. By 1984, a combination of factors, including drought, inflation, and confused application of Islamic law
, reduced donor disbursements and capital flight led to a serious foreign-exchange crisis and increased shortages of imported inputs and commodities. More significantly, the 1989 revolution caused many donors in Europe, the U.S., and Canada to suspend official development assistance
, but not humanitarian aid
.
However, as Sudan became the world’s largest debtor to the World Bank and International Monetary Fund by 1993, its relationship with the international financial institutions soured in the mid-1990s and has yet to be fully rehabilitated. The government fell out of compliance with an IMF standby program and accumulated substantial arrearages on repurchase obligations. A 4-year economic reform plan was announced in 1988 but was not pursued. An economic reform plan was announced in 1989 and began implementing a 3-year economic restructuring program designed to reduce the public sector deficit, end subsidies, privatize state enterprises, and encourage new foreign and domestic investment. In 1993, the IMF suspended Sudan’s voting rights and the World Bank suspended Sudan’s right to make withdrawals under effective and fully disbursed loans and credits. Lome Funds and EU agricultural credits, totaling more than one billion Euros, also were suspended.
As a result of oil export earnings around $500 million in 2000–01, Sudan’s current account entered surplus for the first time since independence. In 1993, currency controls were imposed, making it illegal to possess foreign exchange without approval. In 1999, liberalization of foreign exchange market
s ameliorated this constraint somewhat. Exports other than oil are largely stagnant. The small industrial sector remains in the doldrums, spending for the war continues to preempt other social investments, and Sudan’s inadequate and declining infrastructure inhibits economic growth.
Since January 2007, a new currency was introduced in parallel to the Sudanese dinar
(SDG), the new Sudanese pound
(SDG) at the conversion rate of one new pound for one hundred dinars (or one thousand old pounds). Starting July 2007, the Sudanese pound is the only Sudanese currency with legal tender.
facilities consist of one 4800 kilometres (2,982.6 mi), single-track railroad with a feeder line
, supplemented by limited river steamers, Sudan airways, and about 1,900 km. (1,200 mi.) of paved and gravel road—primarily in greater Khartoum
, Port Sudan
, and the north. Some north-south roads serve the oil fields of neighboring South Sudan
. The 1600 kilometres (994.2 mi) Greater Nile Oil Pipeline
extends from the Heglig (Sudan) and Unity (South Sudan) oil fields via the Nuba Mountains
and Khartoum to the oil export terminal in Port Sudan on the Red Sea
.
consists of agricultural processing and various light industries located in Khartoum North. In recent years, the Giad Industrial Complex in Al Jazirah state introduced the assembly of small autos and trucks, and some heavy military equipment such as armored personnel carriers and the proposed “Bashir” main battle tank
. Although Sudan is reputed to have great mineral
resources, exploration has been quite limited, and the country’s real potential is unknown. Small quantities of asbestos
, chromium
, and mica
are exploitoad commercially.
exploration first began in Sudan in the mid-1970s. Significant finds were made in the Upper Nile region and commercial quantities of oil began to be exported in October 2000, reducing Sudan’s outflow of foreign exchange for imported petroleum products. Today, oil is an important export industry in Sudan. Estimates suggest that oil accounts for between 70% and 90% of Sudan's total exports. The primary importers of Sudanese oil are Japan, China, South Korea, Indonesia, and India.
Most of Sudan's oil reserves are located in the Muglad
and Melut
rift basins in the south of the country. Oil fields in the south, such as those at Heglig
and in the South Sudan
ese state of Unity
, formerly part of Sudanese territory, are linked to the country's refineries via pipelines. The two largest oil pipelines are the Greater Nile Oil Pipeline
, which travels 1,600 kilometres from the Unity oil field to Port Sudan
on the Red Sea
via Khartoum, and the PetroDar
pipeline, which extends 1,380 kilometres from the Palogue oil field in the Melut Basin to Port Sudan.
Crude oil from the Muglad Basin is known as "Nile Blend" and is refined at the Khartoum crude oil refinery
. In 2006, the China National Petroleum Corporation
upgraded the Khartoum refinery, doubling its capacity to 100000 oilbbl/d. Oil from the Melud Basin is known as "Dar Blend" and is refined at the Port Sudan Refinery
, which has a capacity of 21700 oilbbl/d. In 2005, the Sudanese government contracted Petronas
to build a new refinery at Port Sudan.
Sudan's crude oil output is predicted to peak in 2008, although current revenue levels may be sustained for a decade or more.
, Malaysia and India
are the major investors.
an investors, considering the continuing U.S.
economic, trade, and financial sanctions regime, are the most likely providers of technology for this purpose. More than 70% of Sudan’s hydropower comes from the Roseires Dam
on the Blue Nile
grid. Various projects are proposed to expand hydropower, thermal generation, and other sources of energy, but so far the government has had difficulty arranging sufficient financing.
A new dam which is being established in Merowe is scheduled to open in 2008 and will add 1250 MW of electricity.
, the Netherlands
, Italy
, Germany
, Saudi Arabia
, Kuwait
, and other Organization of Petroleum Exporting Countries (OPEC) nations traditionally have supplied most of Sudan’s economic assistance. Sudan’s role as an economic link between Arab and African countries is reflected by the presence in Khartoum of the Arab Bank for African development. The World Bank
had been the largest source of development loans.
Sudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
's economy boomed on the back of increases in oil production, high oil prices, and large inflows of foreign direct investment. GDP growth registered more than 10% per year in 2006 and 2007. From 1997 to date, Sudan has been working with the IMF to implement macroeconomic reforms, including a managed float of the exchange rate. Sudan began exporting crude oil in the last quarter of 1999. Agricultural production remains important, because it employs 80% of the work force and contributes a third of GDP. The Darfur conflict, the aftermath of two decades of civil war in the south, the lack of basic infrastructure in large areas, and a reliance by much of the population on subsistence agriculture ensure much of the population will remain at or below the poverty line for years despite rapid rises in average per capita income. In January 2007, the government introduced a new currency, the Sudanese Pound, at an initial exchange rate of $1.00 equals 2 Sudanese Pounds.
Overview
SudanSudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
is buffeted by civil war, political instability, adverse weather, weak world commodity prices, a drop in remittances from abroad, and counterproductive economic policies. The private sector's main areas of activity are agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
and trading, with most private industrial investment predating 1980. Agriculture employs 80% of the work force. Industry mainly processes agricultural items. Sluggish economic performance over the past decade, attributable largely to declining annual rainfall, has kept per capita income at low levels. A large foreign debt and huge arrears continue to cause difficulties. In 1990 the IMF took the unusual step of declaring Sudan noncooperative because of its nonpayment of arrears to the Fund. After Sudan backtracked on promised reforms in 1992–93, the IMF threatened to expel Sudan from the Fund. To avoid expulsion, Khartoum
Khartoum
Khartoum is the capital and largest city of Sudan and of Khartoum State. It is located at the confluence of the White Nile flowing north from Lake Victoria, and the Blue Nile flowing west from Ethiopia. The location where the two Niles meet is known as "al-Mogran"...
agreed to make token payments on its arrears to the Fund, liberalize exchange rates, and reduce subsidies, measures it has partially implemented. The government's continued prosecution of the civil war and its growing international isolation continued to inhibit growth in the nonagricultural sectors of the economy during 1999. The government has worked with foreign partners to develop the oil sector, and the country is producing just over half a million barrels per day (2007, from Sudan tribune website).
Macro-economic trend
SudanSudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
's primary resources are agricultural
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
, but oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
production and export are taking on greater importance since October 2000. Although the country is trying to diversify its cash crops, cotton
Cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
and gum Arabic
Gum arabic
220px|thumb|right|Acacia gumGum arabic, also known as acacia gum, chaar gund, char goond, or meska, is a natural gum made of hardened sap taken from two species of the acacia tree; Acacia senegal and Acacia seyal...
remain its major agricultural exports. Grain sorghum
Sorghum
Sorghum is a genus of numerous species of grasses, one of which is raised for grain and many of which are used as fodder plants either cultivated or as part of pasture. The plants are cultivated in warmer climates worldwide. Species are native to tropical and subtropical regions of all continents...
(dura) is the principal food crop, and wheat
Wheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
is grown for domestic consumption. Sesame seeds and peanut
Peanut
The peanut, or groundnut , is a species in the legume or "bean" family , so it is not a nut. The peanut was probably first cultivated in the valleys of Peru. It is an annual herbaceous plant growing tall...
s are cultivated for domestic consumption and increasingly for export. Livestock
Livestock
Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...
production has vast potential, and many animals, particularly camel
Camel
A camel is an even-toed ungulate within the genus Camelus, bearing distinctive fatty deposits known as humps on its back. There are two species of camels: the dromedary or Arabian camel has a single hump, and the bactrian has two humps. Dromedaries are native to the dry desert areas of West Asia,...
s and sheep
Domestic sheep
Sheep are quadrupedal, ruminant mammals typically kept as livestock. Like all ruminants, sheep are members of the order Artiodactyla, the even-toed ungulates. Although the name "sheep" applies to many species in the genus Ovis, in everyday usage it almost always refers to Ovis aries...
, are exported to Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
, Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
, and other Arab
Arab
Arab people, also known as Arabs , are a panethnicity primarily living in the Arab world, which is located in Western Asia and North Africa. They are identified as such on one or more of genealogical, linguistic, or cultural grounds, with tribal affiliations, and intra-tribal relationships playing...
countries. However, Sudan remains a net importer of food. Problems of irrigation
Irrigation
Irrigation may be defined as the science of artificial application of water to the land or soil. It is used to assist in the growing of agricultural crops, maintenance of landscapes, and revegetation of disturbed soils in dry areas and during periods of inadequate rainfall...
and transportation remain the greatest constraints to a more dynamic agricultural economy.
Mean wages were $1.39 per manhour in 2009.
History since independence
Current GDP per capita of Sudan grew 46% in the Sixties reaching a peak growth of 170% in the Seventies. But this proved unsustainable and growth consequently scaled back to 34% in the Eighties. Finally, it shrank by 26% in the Nineties.Until the early 1970s Sudan's agricultural output was mostly dedicated to internal consumption. In 1972 the Sudanese government became more pro-Western, and made plans to export food and cash crop
Cash crop
In agriculture, a cash crop is a crop which is grown for profit.The term is used to differentiate from subsistence crops, which are those fed to the producer's own livestock or grown as food for the producer's family...
s. However, commodity prices declined throughout the 1970s causing economic problems for Sudan. At the same time, debt servicing costs, from the money spent mechanizing agriculture, rose. In 1978 the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
(IMF) negotiated a Structural Adjustment Program with the government. This further promoted the mechanized export agriculture sector. This caused great economic problems for the pastoralists of Sudan.
During the late 1970s and 1980s, the IMF, World Bank, and key donors worked closely to promote reforms to counter the effect of inefficient economic policies and practices. By 1984, a combination of factors, including drought, inflation, and confused application of Islamic law
Sharia
Sharia law, is the moral code and religious law of Islam. Sharia is derived from two primary sources of Islamic law: the precepts set forth in the Quran, and the example set by the Islamic prophet Muhammad in the Sunnah. Fiqh jurisprudence interprets and extends the application of sharia to...
, reduced donor disbursements and capital flight led to a serious foreign-exchange crisis and increased shortages of imported inputs and commodities. More significantly, the 1989 revolution caused many donors in Europe, the U.S., and Canada to suspend official development assistance
Development aid
Development aid or development cooperation is aid given by governments and other agencies to support the economic, environmental, social and political development of developing countries.It is distinguished...
, but not humanitarian aid
Humanitarian aid
Humanitarian aid is material or logistical assistance provided for humanitarian purposes, typically in response to humanitarian crises including natural disaster and man-made disaster. The primary objective of humanitarian aid is to save lives, alleviate suffering, and maintain human dignity...
.
However, as Sudan became the world’s largest debtor to the World Bank and International Monetary Fund by 1993, its relationship with the international financial institutions soured in the mid-1990s and has yet to be fully rehabilitated. The government fell out of compliance with an IMF standby program and accumulated substantial arrearages on repurchase obligations. A 4-year economic reform plan was announced in 1988 but was not pursued. An economic reform plan was announced in 1989 and began implementing a 3-year economic restructuring program designed to reduce the public sector deficit, end subsidies, privatize state enterprises, and encourage new foreign and domestic investment. In 1993, the IMF suspended Sudan’s voting rights and the World Bank suspended Sudan’s right to make withdrawals under effective and fully disbursed loans and credits. Lome Funds and EU agricultural credits, totaling more than one billion Euros, also were suspended.
As a result of oil export earnings around $500 million in 2000–01, Sudan’s current account entered surplus for the first time since independence. In 1993, currency controls were imposed, making it illegal to possess foreign exchange without approval. In 1999, liberalization of foreign exchange market
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
s ameliorated this constraint somewhat. Exports other than oil are largely stagnant. The small industrial sector remains in the doldrums, spending for the war continues to preempt other social investments, and Sudan’s inadequate and declining infrastructure inhibits economic growth.
Since January 2007, a new currency was introduced in parallel to the Sudanese dinar
Sudanese dinar
The dinar was the currency of Sudan between June 8, 1992 and January 10, 2007. Its ISO 4217 code is "SDD". It is now replaced by the pound.-History:...
(SDG), the new Sudanese pound
Sudanese pound
The Sudanese pound is the currency of Sudan and also used in South Sudan until finalization of the introduction of the South Sudanese pound. Both Arabic and English names for the denominations appear on the country's banknotes and coins. On 24 July 2011, Sudan launched a new currency...
(SDG) at the conversion rate of one new pound for one hundred dinars (or one thousand old pounds). Starting July 2007, the Sudanese pound is the only Sudanese currency with legal tender.
| Year | GDP | US$ Exchange | Inflation Index (2000=100) |
|---|---|---|---|
| 1980 | 4,950 | 0.49 Old Sudanese Pounds | 0.016 |
| 1985 | 13,910 | 2.30 Old Sudanese Pounds | 0.062 |
| 1990 | 110,000 | 4.50 Old Sudanese Pounds | 0.56 |
| 1995 | 423,332 | 57.83 Sudanese Dinars | 19 |
| 2000 | 3,179,582 | 257.14 Sudanese Dinars | 100 |
| 2005 | 6,747,748 | 243.60 Sudanese Dinars | 143 |
| 2007 | ? | 2.005 New Sudanese Pounds | ? |
Infrastructure
The country’s transportTransport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...
facilities consist of one 4800 kilometres (2,982.6 mi), single-track railroad with a feeder line
Feeder line
-Telecommunications:In communications, a feeder line is a peripheral route or branch from a main line or trunk line.-Electrical Engineering:...
, supplemented by limited river steamers, Sudan airways, and about 1,900 km. (1,200 mi.) of paved and gravel road—primarily in greater Khartoum
Khartoum
Khartoum is the capital and largest city of Sudan and of Khartoum State. It is located at the confluence of the White Nile flowing north from Lake Victoria, and the Blue Nile flowing west from Ethiopia. The location where the two Niles meet is known as "al-Mogran"...
, Port Sudan
Port Sudan
Port Sudan is the capital of Red Sea State, Sudan; it has 489,725 residents . Located on the Red Sea, it is the Republic of Sudan's main port city.-History:...
, and the north. Some north-south roads serve the oil fields of neighboring South Sudan
South Sudan
South Sudan , officially the Republic of South Sudan, is a landlocked country located in the Sahel region of northeastern Africa. It is also part of the North Africa UN sub-region. Its current capital is Juba, which is also its largest city; the capital city is planned to be moved to the more...
. The 1600 kilometres (994.2 mi) Greater Nile Oil Pipeline
Greater Nile Oil Pipeline
The Greater Nile Oil Pipeline is an important oil export pipeline in Sudan. It extends for approximately of which approximately 1.8 kilometres is submarine. It was constructed by the Greater Nile Petroleum Operating Company and commenced operation in 1999...
extends from the Heglig (Sudan) and Unity (South Sudan) oil fields via the Nuba Mountains
Nuba Mountains
Nuba Mountains is an area located in South Kordofan, Sudan. The area is home to a group of indigenous ethnic groups known collectively as the Nuba peoples. In the 18th century, Nuba Mountains became home to the kingdom of Taqali that controlled the hills of the mountains until their defeat by...
and Khartoum to the oil export terminal in Port Sudan on the Red Sea
Red Sea
The Red Sea is a seawater inlet of the Indian Ocean, lying between Africa and Asia. The connection to the ocean is in the south through the Bab el Mandeb strait and the Gulf of Aden. In the north, there is the Sinai Peninsula, the Gulf of Aqaba, and the Gulf of Suez...
.
Industry
Sudan’s limited industrial developmentIndustry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
consists of agricultural processing and various light industries located in Khartoum North. In recent years, the Giad Industrial Complex in Al Jazirah state introduced the assembly of small autos and trucks, and some heavy military equipment such as armored personnel carriers and the proposed “Bashir” main battle tank
Tank
A tank is a tracked, armoured fighting vehicle designed for front-line combat which combines operational mobility, tactical offensive, and defensive capabilities...
. Although Sudan is reputed to have great mineral
Mineral
A mineral is a naturally occurring solid chemical substance formed through biogeochemical processes, having characteristic chemical composition, highly ordered atomic structure, and specific physical properties. By comparison, a rock is an aggregate of minerals and/or mineraloids and does not...
resources, exploration has been quite limited, and the country’s real potential is unknown. Small quantities of asbestos
Asbestos
Asbestos is a set of six naturally occurring silicate minerals used commercially for their desirable physical properties. They all have in common their eponymous, asbestiform habit: long, thin fibrous crystals...
, chromium
Chromium
Chromium is a chemical element which has the symbol Cr and atomic number 24. It is the first element in Group 6. It is a steely-gray, lustrous, hard metal that takes a high polish and has a high melting point. It is also odorless, tasteless, and malleable...
, and mica
Mica
The mica group of sheet silicate minerals includes several closely related materials having highly perfect basal cleavage. All are monoclinic, with a tendency towards pseudohexagonal crystals, and are similar in chemical composition...
are exploitoad commercially.
Petroleum
Extensive petroleumPetroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
exploration first began in Sudan in the mid-1970s. Significant finds were made in the Upper Nile region and commercial quantities of oil began to be exported in October 2000, reducing Sudan’s outflow of foreign exchange for imported petroleum products. Today, oil is an important export industry in Sudan. Estimates suggest that oil accounts for between 70% and 90% of Sudan's total exports. The primary importers of Sudanese oil are Japan, China, South Korea, Indonesia, and India.
Most of Sudan's oil reserves are located in the Muglad
Muglad Basin
The Muglad Basin is a large rift basin in Northern Africa. The basin is situated within southern Sudan and covers an area of approximately 120,000 km2. It contains a number of hydrocarbon accumulations of various sizes, the largest of which are the Heglig and Unity oil fields...
and Melut
Melut Basin
The Melut Basin is a rift basin in South Sudan. It is situated in the states of Upper Nile and Jonglei, south of the capital Khartoum and east of the river Nile. The Basin contains several hydrocarbon accumulations, although oil exploration, as elsewhere in Sudan, has been hindered by conflict...
rift basins in the south of the country. Oil fields in the south, such as those at Heglig
Heglig
Heglig is a small town in West Kurdufan state in central Sudan, near the border with Southern Sudan. The area was contested during the Sudanese Civil War...
and in the South Sudan
South Sudan
South Sudan , officially the Republic of South Sudan, is a landlocked country located in the Sahel region of northeastern Africa. It is also part of the North Africa UN sub-region. Its current capital is Juba, which is also its largest city; the capital city is planned to be moved to the more...
ese state of Unity
Unity (state)
Unity, sometimes known as Western Upper Nile, is one of the 10 states of the African nation of South Sudan. It has an area of 35,956 km². Unity, is inhabited predominantly by two ethnic groups, the Nuer and the Dinka ....
, formerly part of Sudanese territory, are linked to the country's refineries via pipelines. The two largest oil pipelines are the Greater Nile Oil Pipeline
Greater Nile Oil Pipeline
The Greater Nile Oil Pipeline is an important oil export pipeline in Sudan. It extends for approximately of which approximately 1.8 kilometres is submarine. It was constructed by the Greater Nile Petroleum Operating Company and commenced operation in 1999...
, which travels 1,600 kilometres from the Unity oil field to Port Sudan
Port Sudan
Port Sudan is the capital of Red Sea State, Sudan; it has 489,725 residents . Located on the Red Sea, it is the Republic of Sudan's main port city.-History:...
on the Red Sea
Red Sea
The Red Sea is a seawater inlet of the Indian Ocean, lying between Africa and Asia. The connection to the ocean is in the south through the Bab el Mandeb strait and the Gulf of Aden. In the north, there is the Sinai Peninsula, the Gulf of Aqaba, and the Gulf of Suez...
via Khartoum, and the PetroDar
PetroDar
The PetroDar Operating Company Ltd is a consortium of oil exploration and production companies operating in Sudan with its headquarters in Khartoum. The consortium was incorporated in the Virgin Islands on 31 October 2001...
pipeline, which extends 1,380 kilometres from the Palogue oil field in the Melut Basin to Port Sudan.
Crude oil from the Muglad Basin is known as "Nile Blend" and is refined at the Khartoum crude oil refinery
Sudan Khartoum Refinery Company
The Sudan Khartoum Refinery Company is a petroleum company in Sudan. The company its name is abbreviated to KRC. The company was founded in 1997 and began operations in 2000...
. In 2006, the China National Petroleum Corporation
China National Petroleum Corporation
China National Petroleum Corporation is a state-owned fuel-producing corporation and the largest integrated oil and gas company in the People's Republic of China...
upgraded the Khartoum refinery, doubling its capacity to 100000 oilbbl/d. Oil from the Melud Basin is known as "Dar Blend" and is refined at the Port Sudan Refinery
Port Sudan Refinery
The Port Sudan Refinery is a petroleum refining company located in Port Sudan, Sudan, on the shores of the Red Sea.-External links:*...
, which has a capacity of 21700 oilbbl/d. In 2005, the Sudanese government contracted Petronas
Petronas
PETRONAS, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company that was founded on August 17, 1974. Wholly owned by the Government of Malaysia, the corporation is vested with the entire oil and gas resources in Malaysia and is entrusted with the responsibility of developing and...
to build a new refinery at Port Sudan.
Sudan's crude oil output is predicted to peak in 2008, although current revenue levels may be sustained for a decade or more.
Embargos and sanctions
On November 3, 1997, the U.S. government imposed a trade embargo against Sudan and a total asset freeze against the Government of Sudan under Executive Order 13067. The U.S. believed the Government of Sudan gave support to international terrorism, destabilized neighboring governments, and permitted human rights violations. A consequence of the embargo is that U.S. corporations cannot invest in the Sudan oil industry, so companies in ChinaChina
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
, Malaysia and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
are the major investors.
Electrical generation
Sudan is seeking to expand its installed capacity of electrical generation of around 300MW;of which 180 MW is hydroelectric and the rest thermal. EuropeEurope
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
an investors, considering the continuing U.S.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
economic, trade, and financial sanctions regime, are the most likely providers of technology for this purpose. More than 70% of Sudan’s hydropower comes from the Roseires Dam
Roseires Dam
The Roseires Dam is a dam on the Blue Nile at Ad Damazin, just upstream of the town of Er Roseires, in Sudan. It consists of a concrete buttress dam 1 km wide with a maximum height of 68m, and an earth dam on either side. The earth dam on the eastern bank is 4 km long, and that on the...
on the Blue Nile
Blue Nile
The Blue Nile is a river originating at Lake Tana in Ethiopia. With the White Nile, the river is one of the two major tributaries of the Nile...
grid. Various projects are proposed to expand hydropower, thermal generation, and other sources of energy, but so far the government has had difficulty arranging sufficient financing.
A new dam which is being established in Merowe is scheduled to open in 2008 and will add 1250 MW of electricity.
Economic assistance
Historically, the U.S.United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
, Kuwait
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
, and other Organization of Petroleum Exporting Countries (OPEC) nations traditionally have supplied most of Sudan’s economic assistance. Sudan’s role as an economic link between Arab and African countries is reflected by the presence in Khartoum of the Arab Bank for African development. The World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
had been the largest source of development loans.