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Cablegate: Goss Official Discusses Oil Pipelines, War and Peace With

VZCZCXRO5503
PP RUEHROV
DE RUEHKH #0262/01 0541421
ZNR UUUUU ZZH
P 231421Z FEB 08
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC PRIORITY 0016
INFO RUCNIAD/IGAD COLLECTIVE
RHMFISS/CJTF HOA

UNCLAS SECTION 01 OF 02 KHARTOUM 000262

SIPDIS

DEPT FOR AF/SPG, S/CRS, AF SE WILLIAMSON
DEPT PLS PASS USAID FOR AFR/SUDAN
DEPARTMENT PLS PASS TREASURY FOR OFAC
ADDIS ABABA FOR USAU

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL ECON ENRG UNSC SU
SUBJECT: GOSS OFFICIAL DISCUSSES OIL PIPELINES, WAR AND PEACE WITH
THE NORTH

1. (SBU) (Summary) Consul General Juba met on February 20 with
George Achor, Undersecretary in the Ministry of Presidential
Affairs, to discuss the GoSS desire to attract American business
interests to South Sudan, especially for the construction of a new
oil pipeline to the south. The discussion quickly turned to issues
of war and peace, in which he expressed the strong opinion that war
with the North was a near certainty after 2011, if not sooner. End
Summary.

U.S. Investment in an Oil Pipeline Will Benefit the South
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- - - - - - - - -
2. (SBU) Achor opened the discussion by expressing his strong desire
to see an American oil company develop Southern oil fields and build
a new oil pipeline along the Ethiopian-Kenyan border to either
Mombasa or Djibouti. When told that current U.S. sanctions do not
permit an American company to participate in such a venture, Achor
expressed his dismay. (Note: According to the November 1, 2007
OFAC "Final Rule," sanctions regulations prohibit participation by
U.S. firms in any transaction relating to Sudan's petroleum or
petrochemical industries, in any part of the country. End Note.)
Such a venture would only benefit the South, he said, not the
national government. A prohibition on Southern economic development
of this kind forces the South to remain dependant on the North and,
in the end, actually works to increase oil revenues to the NCP since
all new oil found in the South will have to flow through the single
existing pipeline to Port Sudan, where the NCP can continue to
benefit from profits made on the new development of Southern mineral
resources. Developing an alternate Southern oil pipeline would deny
the benefits of future oil development to the North, and it would
only fully benefit the people of the South.

3. (SBU) Such a Southern pipeline would be expensive, and not as
economical as the already existing northern route, the Congen
pointed out. Achor agreed, but stated his opinion that war with the
North is coming and that the existing pipeline was not viable in the
long run. With American expertise, he said, they could build a new
one south in a matter of two years. Congen responded that a war
would mean the end of oil revenues for both sides since no business
would risk working in a war zone where their facilities were sure to
be bombed.

"We Will Take the War to Khartoum"
- - - - - - - - - - - - - - - - -
4. (SBU)The Congen asked Achor why he was so sure war would break
out. Achor responded that the NCP would never let the South's
mineral wealth go without a fight, for which, he said, the South is
ready. "This time we will take the war to Khartoum so that the NCP
finally suffers the consequences of its actions." When asked how
that would happen, Achor expressed his confidence that other
marginalized groups in the East and West of Sudan would join the
fight, and that the SAF was weaker than most people realized.

The South Will Secede, Whatever the Results in 2009
- - - - - - - - - - - - - - - - - -
- - - - - - - -
5. (SBU) The Congen asked if Achor had any hope that the elections
in 2009 would take place. Achor responded that if they did not,
that would be the trigger for war. If they did take place, he said
Kiir would run and likely win the Presidency. Asked if that didn't
mean a unified Sudan, he said probably not because it was almost
certain that the people of the South would vote for independence in
2011 anyway. He recounted how in a conversation with a German
business delegation, Kiir was asked what he would do if elected
President and the South voted for separation. Kiir, he said,
responded that he would resign the Presidency to stay with the
South. There was simply too much bitterness and distrust in the
South to stay unified with the North.

Comment
- - - -
6. (SBU) As is obvious, Achor is a hard liner on the issue of
Southern independence. However, his opinion is widely shared that
long-standing Southern bitterness and distrust toward the North
(exacerbated by the perceived continued NCP maneuvering to undermine
the CPA) will result in a vote for independence come 2011 no matter
what happens in the 2009 election.

7. (SBU) Comment continued: As to the oil issue, it might well be
worth considering whether the current policy banning American oil
interests from doing business in the South actually does work to the
NCP's advantage. Allowing an American firm to at least bid on
building a pipeline to Mombassa, were one to be built, would free
the GoSS and any future independent Southern state from having to
share new oil field revenues with a Northern government.

KHARTOUM 00000262 002 OF 002


FERNANDEZ

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