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Oil in the Sudan - A complex reality

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A Complex Reality: The Strategic Behaviour of Multinational Oil Corporations and the New Wars In Sudan

By Luke A. Patey, Danish Institute for International Studies

March 2006 — The influence of Multinational Corporations in war-torn societies is becoming an increasingly pertinent element of international security and development. MNCs factor into the equation of contemporary civil war by representing economic vehicles that allow domestic actors to realize value from local assets through the global marketplace. Sudan is no exception to this dynamic. MNCs exploiting oil resources in the country were seen as representing a further complication in an already long-standing and devastating North-South civil war between the Government of Sudan and the Sudan People’s Liberation Army/Movement. However, while the impact of MNCs has been well documented, there exists little knowledge concerning the factors that guide the strategic behaviours of these enterprises. Most observers have viewed the operations of MNCs in Sudan and other conflict affected countries as being solely guided by a profit-seeking rationale, impervious to such conditions as insecurity and political instability. While such conventional wisdom holds truth and should not be dismissed, the tendency among non-governmental organizations, the media, and academics to group together MNCs and the reasoning behind their actions fails to uncover fully the critical differences that lie behind the logic of their individual behaviour. Based on observed events in Sudan, there is a need to question which construct of variables does indeed influence the strategic behaviour of MNCs in the country.

This study maps the operations of eight prominent MNCs1 in Sudan since the initial exploration of oil, through its production, to the present day structure of the oil industry. It argues that the domestic and international environment of MNCs is far more complex than perceived by the casual observer. Each corporation held a different set of domestic and international factors which contributed to the formation of their decision-making calculus. These factors are also found to be dynamic in nature, interconnected within and between companies, and varying in levels of priority for each MNC. Altogether, the empirical findings of this study cast light on a relatively dark spot in literature on the political economy of armed conflict.

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The strategic behaviour of multinational oil corporations and the new wars in Sudan
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