South Sudan’s Rebel Leader Machar Vows to Target Oil Fields

Mar 31, 2014 10:39 am ET

(Updates with economy’s dependence on oil in seventh paragraph.)

March 31 (Bloomberg) -- South Sudanese rebels plan to capture key oil installations to force President Salva Kiir to step down and end more than three months of conflict in the world’s newest nation, former Vice President Riek Machar said.

Fighters allied with Machar, known as the White Army, are “mobilizing” to attack the Paloch oil fields that are the main source of revenue for the country’s military, the 60-year-old rebel leader said in a March 27 interview at his bush hideout in Upper Nile state. Machar fled the capital, Juba, in December after the government says he attempted a coup against Kiir.

“We want to take control of the oil field,” said Machar, dressed in green military fatigues and wearing gold-rimmed sunglasses. “This is our oil. We must take control of Paloch to deny Salva Kiir revenue to buy more arms.”

Upper Nile is South Sudan’s only remaining crude-producing state after the insurgency forced oil companies to stop pumping in neighboring Unity state in December. The country, which gained independence from Sudan in July 2011, is producing about 160,000 barrels per day of oil from fields in Upper Nile, according to the government. The state produces Dar Blend, a low-sulfur crude that is prized by Japanese buyers as a cleaner- burning fuel for power plants.

Current output is probably about 150,000 barrels per day, generating about $15 million for the government and oil companies, said Luke Patey, a researcher on South Sudan’s oil industry from the Danish Institute for International Studies. Production has declined from a pre-conflict level of 240,000 barrels per day, he said.

Economy Shutdown

Capturing Paloch would “basically shut down” the economy, Patey said in a phone interview on March 29 from Copenhagen. “It’s really the choke point for South Sudan government earnings. It’s a major piece in the struggle strategically.”

A 15-month freeze in crude production because of an earlier dispute with neighboring Sudan halved the size of South Sudan’s economy.

Rebel forces have massed in Upper Nile and may advance on Paloch by the end of this week, Major-General Gathoth Gatkuoth, commander of rebel forces in Upper Nile, said in a separate interview on March 27 in the town of Nasir.

“As long as Salva is still in the seat in Juba, then I don’t think we are going to realize peace in the country,” Gatkuoth said.

South Sudan army spokesman Philip Aguer said rebel forces have been attacking government positions around Malakal for the past month and “particularly over the past week.”

“These attacks have been defeated and we are confident that Malakal and the oil areas will be well protected by government forces,” he said in a phone interview from Juba.

Government Resistance

Fighting that began in South Sudan on Dec. 15 has left thousands of people dead and forced at least 860,000 more to flee their homes, according to the United Nations. China National Petroleum Corp., India’s Oil & Natural Gas Corp. and Petroliam Nasional Bhd., the main producers of South Sudan’s oil, evacuated employees from the country because of the fighting.

The rebels have failed to advance significantly north of Malakal, the capital of Upper Nile, during the conflict and will probably face heavy government resistance around Paloch, Patey said.

The White Army emerged during a rebellion jointly led by Machar in the early 1990s. Its name comes from the practice by the region’s cattle herders of smearing pale ash on themselves as protection against insects.

White Army fighters and soldiers who have defected are now ready to capture Paloch, which should have been taken a month ago, said Machar, who is from Unity state.

Oil Importance

“We had our own difficulties,” he said. “We didn’t do enough mobilization, enough sensitization of the importance of the oil field.”

The violence in South Sudan has pitted members of Kiir’s ethnic Dinka community against members of Machar’s Nuer group. The targeting of Nuer people in Juba by security forces loyal to Kiir has divided South Sudan into “tribes” and “discredited” the president, said Machar, who denies Kiir’s allegations he tried to stage a coup.

“I think he should be honest to himself and see that getting a solution would mean him stepping down,” Machar said. Capturing Paloch after retaking Malakal will force Kiir to “talk,” he said.

The rebels are receiving no foreign assistance, according to Machar, who said he’s fighting for democracy. The struggle is being funded by “our own people” and his forces are using captured weapons, he said.

Regional Forces

The Intergovernmental Authority on Development, a group of seven East African nations, has been mediating negotiations between the parties since December in the Ethiopian capital, Addis Ababa. The bloc has called for regional forces to protect 36 officials monitoring a Jan. 23 truce that’s been repeatedly broken.

The proposed forces from Ethiopia, Kenya, Rwanda and Burundi would also secure vital infrastructure such as oil installations, IGAD said this month.

The deployment would be “hostile” and treated the same as Uganda’s army fighting alongside South Sudan’s military, Machar said.

“They’ve no right to deploy in our oil fields,” he said. “If they want to colonize us we will fight them.”