Austrian oil company pulls out

The Austrian government-controlled OMV oil company, operating in Sudan's controversial oil fields, sold its interests this week to India's oil and natural gas company, ONGC Videsh. OMV Company spokesman, Thomas Huemer, told IRIN the company's oil exploration in Sudan was a financial engagement, and that it had decided to put its money elsewhere. "It's a normal thing to do," he said. The company had decided to pull out - in a deal worth US $115 million - for "strategic and economic" reasons, he said. This is the third western company to sell up in Sudan, following numerous reports documenting human rights abuses around the oil fields, and campaigns by human rights groups who say the country's oil industry - worth at least US $ 1 billion a year - has exacerbated the 20 year conflict, by providing the revenue which pays for it. Canadian company Talisman sold its interests in March to the same Indian company and Swedish Lundin sold some of its shares in June to Malaysia's Petronas. Huemer maintained that OMV was a force for good in Sudan. "While we there, even as a minority partner, we tried to improve the conditions of the local population," he added. "We had a code of conduct to improve conditions and we put in 6.5 million euro to help with health, sanitation and so on. We followed ethical standards aimed at improving local conditions." Western oil companies are being heavily pressurised by both international and national lobby groups to either pull out of Sudan, or guarantee to protect human rights. OMV was criticised for its resumption of activities in Sudan in March 2003, having suspended them since January 2002 for "security reasons". The company said that "positive developments in the peace process," had enabled it to return. At the forefront of the lobby campaign in Austria was Sudan Plattform Austria, a group of church bodies and NGOs, which said that the only way to "normalise" OMV's activities in Sudan would be in the context of peace. The New Sudan Council of Churches reiterated last month its position that all oil exploration and exploitation should cease in Sudan until a comprehensive peace agreement had been signed between the government and the Sudan People's Liberation Movement/Army rebel group. While oil reserves produce a key source of income for the Sudanese government, a study conducted by PFC Strategic Studies last year predicted that while current earnings are probably between $ 1 and 1.2 billion annually, the resources would soon dry up. "Without a dramatic improvement in the field size distribution pattern and success rates, annual oil production and annual net cash flow to the government will decline at a significant rate after 2008-2010," it said. [To access the report see www.csis.org ]