Management of the Environment in Sudan’s
Oil Industry
Bashir MK Badawi
Khartoum, April 2006
Management of the Environment in Sudan’s Oil Industry
Table of Contents
Executive Summary
3
Purpose ………………………………………………………………………………….5
Introduction ……………………………………………………………………………...6
1
2
3
1.
2.
Importance of Environmental Management: Unity State Case ………………….8
Introduction – Unity State …………………………………………………………8
Environmental concerns in Unity State ………………………………………….10
a.
Exploitation of Oil and Mineral Resources ………………………………10
b.
Loss of Biodiversity ………………………………………………………..11
c.
Indigenous Populations ……………………………………………………12
4
Waste Management in the Oil Industry………………………………………………14
4.1.1 Drilling Mud Cuttings ............................................................................... 14
4.1.2 Produced Water....................................................................................... 15
4.1.3 Refineries ................................................................................................ 17
4.1.4 Tankers ................................................................................................... 17
4.1.5 Bulk Glycols, Tank Washing & Oily Water ............................................... 18
4.2
Conclusions: ................................................................................................. 19
5
Current Methods in Environmental Manangement
20
5.1
Prescriptive or Command and Control (CAC) method .................................. 20
5.2
Performance based or Market Based Initiative (MBI) method ...................... 21
5.2.1 Environment Management Systems (EMS)............................................. 21
5.2.2 Program for Pollution Control Evaluation & Rating (Ref: 2) ..................... 23
5.2.2.1
Objectives of PROPER (Ref: 2)...................................................... 25
5.2.2.2
Measurable Rating Indicators ......................................................... 26
5.2.2.3
Impact of PROPER on Pollution Levels ......................................... 28
5.2.2.4
Comparison of PROPER and ISO .................................................. 28
5.2.2.5
Concluding Remarks on PROPER ................................................. 28
6
Conclusions for Sudan
30
6.1
Recommendations ........................................................................................ 31
7
References
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Management of the Environment in Sudan’s Oil Industry
Executive Summary

The World Bank states: “Environmental concerns are important for the
development of a sustainable oil and gas sector. Hence, the report will
concentrate on the impact of the burgeoning oil industry due to its propensity to
pollute on a vast scale. Many developing countries have faced this challenge.

Rapid industrialisation and development in Sudan has made it imperative that
the environmental stakeholders develop the systems and procedures in
tandem, to manage and protect the environment in-country.

Unity State in Southern Sudan is of prime importance to the burgeoning oil
industry in Sudan. At present, Greater Nile Petroleum Operating Company
(GNPOC) is producing over 300,000 bpd of heavy, sweet crude from the
northern regions of the state. White Nile Petroleum (WNPOC) is planning to
begin production from the Thar Jath field in Block 5A, by the end of 2006. As a
result of its wealth in petroleum, the state has undergone drastic environmental
change both to its ecology and to its indigenous population. Over 90% of the
people are from the Nuer tribe while the remaining tribes are dominated by the
Dinka.

Unity State is contained within the ecologically sensitive Sudd area. The
biodiversity spans swamp and river vegetation; one species is endemic to the
Sudd. It is also an important stop off point for birds, on the migratory route
between Europe and South Africa. The southern areas of the state are
classified as environmentally pristine. Wildlife remains abundant although they
were reduced in quantity during the civil war. The bush meat industry and the
charcoal business, remain an area of concern, centred on the returning IDP’s.

An effective environmental system requires the involvement of all stakeholders.
Governments remain responsible for legislation and enforcement but only the
involvement of external stakeholders will produce the correct balance between
investment climate and environmental care.

An effective environmental system requires companies to be continually
transparent regarding their environmental performance. The developed world
has also struggled with achieving the correct balance between investment and
environmental care.
The main sources of waste are: (Ref:13)

1.
2.
3.
4.
5.
6.
Large volumes of mud cuttings during the drilling phase.
Large volumes of “produced” water during production
Refinery waste streams
Crude oil transportation by tankers
Bulk Glycols
Tank washing / Oily water
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Management of the Environment in Sudan’s Oil Industry

Produce water is the main environmental concern for the oil industry. Invariably
water is always produced alongside oil. Water produced at the surface with the
oil, carries heavy metals, trace minerals and other toxic substances. A major
part of a production facility is the water treatment process. Towards the end of
a reservoir’s life, it may produce more water than oil. i.e. increasing water cut.

There are two problems with the treatment of produced water:
1. Operators underestimate their water production due to financial constraints,
commercial drivers or lax environmental policies.
2. The second issue relates to the cultural difference between the companies
that are currently operating in the oil industry.

There are two agreed methods to regulate environmental performance: (Ref:8)
1. Prescriptive or Command and Control (CAC) methods
2. Performance based or Market Based Initiative (MBI) method

The main environmental management system (EMS) used by oil companies is the
ISO 14000 series. It ensures that the plant has a written management plan or
system for handling the environmental impact of its business.

Indonesia made a study into existing environmental control mechanisms and
discovered their shortcomings. The environmental regulations must be good; the
overall legal system should facilitate enforcement; environmental agencies must
have adequate financial and technical capacity.

The objectives for implementing a suitable environmental system:
1. Encourage pollution reduction beyond compliance
2. Create incentives for environmental management system (EMS)
3. Develop foundations for ISO 14000

External stakeholders can include: non-governmental organisations (NGOs);
environmental societies; press and media; communities. They need to be
empowered with information on the environmental performance of plants and
factories.

The environmental system implemented in Indonesia, offers a viable model for
policy modernization in developing countries. Publicly announced informational
incentives, are important motivators of environmental improvements. Particularly,
for industrial sectors that have a low threshold for negative public images; like the
oil industry.

International organisations and countries can provide funding and advice for
developing a workable environmental policy in Sudan. E.g. UNEP, World Bank and
the Norwegian Environmental Assistance Programme.
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Management of the Environment in Sudan’s Oil Industry
1 Purpose
This paper was prepared for the HCENR / UNDP EMPG workshop 2 held in Juba,
Southern Sudan. It seeks to identify and propose a mechanism for changing
environmental policy in Sudan, to bring it rapidly in line with current developments.
The requirement for an efficient and workable environmental system in Sudan can be
summarised as follows:

Sudan is rapidly progressing to be the biggest producer of oil in East Africa.

Production is set to rise to 500,000 bpd in the 1st qtr and to reach 1 million bpd
by year end.

If current predictions are correct, possible 2-3 million bpd within the next ten
years.

It has become imperative that the environmental stakeholders develop the
systems and procedures in tandem with the increase in production.

A main issue is the judicious balance between maintaining an attractive
investment climate and environmental law enforcement. Too much enforcement
and you reduce the flow of investments. Too little and you attract the
environmentally insensitive investor.

An effective environmental system in country requires the involvement of all
stakeholders. Governments remain responsible for legislation and enforcement
but only the involvement of external stakeholders will produce the correct
balance between investment climate and environmental care.

An effective environmental system requires companies to be continually
transparent regarding their environmental performance. The companies also
need to engage with non governmental stakeholders.

The developed world has also struggled with achieving the correct balance
between investment and environmental care. Only through the involvement of
external stakeholders have they gone some way to achieving a workable
system.

The culture of corporate social responsibility (CSR) is a new phenomenon.
Companies from the developed world have learnt some hard lessons on their
way to developing this culture. One of these is the need for transparency. It is
unlikely that you can have a CSR programme without transparency and the
involvement of third party stakeholders.

The oil industry in Sudan is dominated by quasi-governmental companies from
the developing world, who are venturing outside their national boarders to
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Management of the Environment in Sudan’s Oil Industry
secure oil supply. The importance of these oil investments to both parties, and
their relationship at a government level, remain a concern for the application of
an enforceable environment system.
2 Introduction
This report has concentrated on the impact of the burgeoning oil industry. Not only
because of its importance to the economy but based on the industry’s propensity to
pollute on a vast scale. The rapid development of this sector makes it the number one
concern regarding environmental impact on the ecology of the Sudan and in particular
the country’s potential in: agriculture; wildlife; tourism; forestry.
We have chosen to use Unity State as a case study, since most oil production is
currently from the region.
The IFC/World Bank states:
“Environmental concerns are important for the development of a sustainable oil and
gas sector. Production, transport and use of hydrocarbons can cause serious
environmental damage unless these activities are properly managed. The adverse
environmental consequences include damage to habitats and biodiversity,
greenhouse gas emissions which contribute to global warming, regional air pollution
problems such as acid rain and forest degradation, soil and water contamination, and
local air pollution which threatens the health of urban dwellers.” (Ref 4)
Naturally, the Sudan is not the first country to face this dilemma. Many developing
countries have faced this challenge. This report, like the presentation will try to focus
on presenting a solution to the challenge. During our research, we visited the World
Bank website to review reports and data that they have, regarding the experiences of
other countries. One study in particular concerning Indonesia was felt to be relevant.
The paper by Sheoli Pargal and David Wheeler of the Policy Research Department
(Environment, Infrastructure, and Agriculture Division) at The World Bank gave their
reasons for choosing Indonesia as follows: (Ref: 15)
“Indonesia provides a good test case. It is large and highly varied, in both
environmental and socioeconomic dimensions. Indonesian manufacturing has been
growing rapidly; industrial pollution is clearly a problem and, until very recently, most
areas have had little or no formal pollution control. Indonesia's data collection system
is also one of the most efficient and comprehensive in the developing world, permitting
the construction of the broad database which has been necessary for this exercise.”
Although the paper was concerned about the demarcation of an informal system of
regulation, the findings and propositions are generic and we believe applicable to most
developing countries on the verge of industrial expansion.
Another relevant paper based on Indonesia which we have drawn on heavily is
entitled : Program for Pollution Control Evaluation and Rating (PROPER). A Model for
Promoting Environmental Compliance and Strengthening Transparency and
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Management of the Environment in Sudan’s Oil Industry
Community Participation in Developing Countries by Shakeb Afsah of the International
Resources Group Ltd. Washington DC. (Ref:2)
Other relevant papers reviewed are also included in the reference list.
Indonesia's Dilemma
Increasing Pollution
Unpredictable Enforcement
Limited Capacity
Figure 1: Indonesia’s Dilemma – increasing industrialization & pollution, limited technical &
management capacity and unpredictable legal enforcement (Ref: 2)
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Management of the Environment in Sudan’s Oil Industry
3 Importance of Environmental Management: Unity State
Case
1. Introduction – Unity State
Western Upper Nile (WUN) lies in central southern Sudan. It is located between
latitudes 7° 3’ and 10° 19’ north and between longitudes 28° 46’ and 30° 51’ east.
The State is bordered by 7 other states: Southern Kordofan; Western Kordofan;
Northern Bahr Al Ghazal; Warab State; Lakes state; Upper Nile; Jonglei state.
(See Figure 1)
The size of the area is comparable to the Netherlands. Although still referred to as
WUN or Leech state by many, the area was renamed Unity State in the early
1990’s by the Government of Sudan (GoS).
The Unity State as defined by the Comprehensive Peace Agreement (CPA),
consists of 7-counties: Payijar, Leer, Koch, Guit, Rubkoana, Mayom, Ruweng. The
administrative capital Bentiu is located mid-state in Rubkoana, on the Bahr Al
Ghazal River. Other important towns are: Leer, Adok, Pariang, Koch Nhialdiu,
Wangkel, Mayom and Ganyeil in the far south. (Ref: i)
The majority of the population are Nuer (90%), although other communities, mainly
Dinka, also reside in the north-eastern district of Panarou. The Nuers are
principally made up from three clans: the Jikany (26%), the Bul (34%) and the Leek
(40%). According to the World Health Organisation (WHO), the population has
been estimated for the northern rural areas as 554,941 and 865,000 for the urban
areas. The figurers are constantly changing due to the return of internally displaced
people (IDP). The indigenous population are agro-pastoralists who survive largely
through cattle herding, crop cultivation and fishing. (Ref: i)
Geologically Unity State lies wholly within the Muglad or Sudd sedimentary basin.
It was drilled by Chevron Overseas Petroleum Inc., between 1975 and 1983 and
identified as being a potentially prolific oil producing basin. There are currently 5licensed blocks that extend into the state: Blocks 1, 2, 4, 5A, 5B, 17. Oil is
currently, being produced by the Greater Nile Petroleum Operating Company
(GNPOC) from blocks 1,2 and 4. Plans to develop the newly discovered Thar Jath
field are afoot, with production set to commence from block 5A, by end 2006. The
operator is White Nile Petroleum Operating Company (WNPOC) and they also
intend to drill and develop prospects in Block 5B. (Ref: g)
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Management of the Environment in Sudan’s Oil Industry
Figure 1: Political Map of Sudan showing the location of Western Upper Nile/ Unity State
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Management of the Environment in Sudan’s Oil Industry
2. Environmental concerns in Unity State
a. Exploitation of Oil and Mineral Resources
Oil exploration in Sudan began in the 1950’s. This was initially concentrated on the
continental shelf off the coastal Red Sea area. In the 1960’s the Northern interior
was explore. However, it was only in the 1970’s that Chevron began a countrywide assessment of the prospects for oil. They identified a number of sedimentary
basins and the presence of a source rock (Abu Gabra). Of these the Muglad Basin
was chosen as having the highest probability for the occurrence of suitable
reservoirs.
The Addis Ababa agreement reached between the Nimeri led government and the
Southern Sudanese helped provide the political and security climate for Chevron.
However, the agreement began to unravel and with the discovery of oil being
predominately in Southern states, it heralded a new era in dissatisfaction amongst
the Southern Sudanese. The culmination was the establishment of the Sudan
Peoples Liberation Army (SPLA), headed by the late Dr John Garang.
The main Chevron facilities in the south were targeted by the SPLA and the
company finally withdrew from the Sudan in 1983. A state of Civil war ensued and
lasted until the historic peace agreement signed by the Government and the
SPLM. This culminated in the current CPA which came into effect on 9 th January
2005.
In the early 1990’s the Government of Omar Al Bashir managed to buy back the
licensed concessions held by Chevron since 1983. The licenses for the Muglad
Basin blocks eventually ended up being held by the GNPOC consortium. The
company is currently producing around 300,000 barrels per day (BPD) of high
gravity, low sulphur crude from the Muglad basin.
Figure 1 shows the location of the three blocks held by GNPOC (1-Unity; 2-Heglig;
3-Kaikang) and their location within Unity State. Over 300 wells were drilled by
Chevron and GNPOC in the area. Some of these wells are indicated on the map.
Lundin Petroleum (Lundin) from Sweden signed an exploration and production
sharing agreement (EPSA) with the GoS for block 5A. This led to the discovery of
the Thar Jath field in 1999, which is located west of Bahr Al Jebel River in Unity
State. Probable reserves have been estimated at 150 million barrels of oil-inplace. In April 2003 Lundin Petroleum sold its interest and operator-ship in Block
5A to Petronas Carigarli Overseas for US$142.5 million. Production is expected to
commence 4th quarter 2006. (Ref: g)
Block 5B was signed by Lundin May 2, 2001. It is a large block of 20,119 sq. km
and is located almost wholly in the ecologically sensitive Sudd swamp. Plans are to
use swamp barge drilling units to delineate the prospect. As it lies in the southern
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Management of the Environment in Sudan’s Oil Industry
most part of the Muglad basin and due to the Thar Jath discoveries, prospects for
finding oil in 5B are high. Currently the area has been designated as a ‘pristine’
location from an ecological perspective. (Ref: g)
Unity State has suffered environmentally from the discovery of oil within its
boundaries. Since the time that Chevron made the initial discovery, the state has
become a battle ground between the GoS troops and the SPLA; right up to recent
times with the early Lundin work on Blocks 5A&B.
The main environmental concerns centre around the effects on the ecology of what
is designated a sensitive area (The Sudd). Another concern is the effect on the
local population who became part of the IDP Diaspora and their eventual return to
their ancestral home. (Ref: i)
b. Loss of Biodiversity
The ecology of Unity State is dominated by the Sudd. This is a unique and finely
balanced ecosystem, controlled by two dominant factors, the river and the rains.
The total floodplain is perhaps 100,000 square kilometres and the total area of the
sudd itself varies from 8000 sq. km to 19 sq. km depending on the river flow. A tiny
slope of no more than 5-cms in every kilometre is all that keeps the flowing river
from stopping and becoming a lake. Across the flood plains, four types of land can
be identified: (Ref: c)
i.
ii.
iii.
The permanent swamps along the rivers and standing waters
The ‘toics’ which are deeply flooded fringes of permanent swamps
The intermediate lands which are seasonally inundated by rainfall and
overspills from the rivers
The permanently dry stretches of the ‘high’ land which lie only slightly
above the level of the surrounding flood plain.
iv.
The swamps support a variety of natural vegetation depending on the different
habitats:
i.
ii.
iii.
From open water to swamp – submerged and free floating vegetation
on the edge of running water as represented by Najas pectinat, Pistia
stratoites and Eichhornia crassipes.
On stagnant water- anchored, floating emergent vegetation of Vossia
cuspidate and the giant Cyperus papayrus associated with climbers
such as Ipomoea aquatica, Ipomea carica, Vigna nilotica, Luffa
cylinderica, Cissus ibuensis, sunflower like Hellianthus spp. and the
tall grass Phramites karka.
On the flooded areas beyond the river bank the giant sedge occurs in
deep water sites around inland lakes and lagoon. Typa domingensis
occupies some shallow flooded expanses. (Ref: c)
Permanent swamps form a fringe along the Bahr Al Jebel River up to 30km wide in
the south and progressively declining in width as it moves north.
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Management of the Environment in Sudan’s Oil Industry
Over 19 families of Aquatic plants are found in the Sudd. Some like the Suddia
sagitfolia are found only in the Sudan.
The Sudd is rich in wildlife and contains: lions, jackals, elephants, gazelles, small
cats, hippopotami, buffalos and the endemic Nile Lechwe (Kobus megaceros),
which is a protected species. (Ref: c)
The region is also famous for its avifauna (birds). This is mainly due to the
presence of fish eating birds (pscivorus) and its use as a stop over for migrating
birds, travelling from Europe to South Africa. The Sudd area is known to be the last
habitat of the Shoe Bill (Balaenceps rex). (Ref: c)
The Sudd is also known for its rich variety of fish species. They form the main diet
of the indigenous people during the high water season. Some of the fish found
include: Hamour alhot, Bayad, Egil, Kass, Garmut. (Ref: c)
c. Indigenous Populations
The Nuer and Dinka people of Unity State are semi-nomadic cattle raisers. As
such migration is a seasonal event. They have adapted to a mobile existence and
are accustomed to walking long distances in search of water, grazing lands and
fishing opportunities. However, the Civil war and the advent of the oil industry in
the state precipitated a migration to GoS safe towns like Bentiu. The resultant
effects were: an inability to cultivate; the increase of disease and
malnutrition; loss of access to clean water; loss of livelihood; loss of food
security. (Ref: h)
The building of all weather roads to service the operations in block 5A led to
year round access to forests where local trees were felled for charcoal and general
fuel usage. It also allowed the ‘bush meat’ industry to thrive, resulting in a
reduction in wildlife in the area. (Ref: c)
Contamination of air and water quality is of prime importance to the well being of
the local population and the Sudd ecosystem. In addition, utilisation of the local
work force is imperative for a sustainable project. Training should be an integral
part of issuance of licenses and lack of training should not hamper this aim. (Ref:
h)
Oil industry projects in rural areas have a tendency to encourage the development
of a shanty town settlement outside the perimeter of the site. These are mainly to
solicit work and provide services to the oil workers. These sites are a potential
source of contagious diseases and a breeding ground for discontent. They provide
a barometer to the social aspects of the agreed EPSA. (Ref: h)
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Management of the Environment in Sudan’s Oil Industry
Figure 2: Map of Unity State superimposed with the location of licensed blocks, rig
locations and infrastructure (Ref: e)
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Management of the Environment in Sudan’s Oil Industry
4 Waste Management in the Oil Industry
The oil industry defines waste management as follows:
re-use, recycling, reduction and disposal throughout every stage of operation
from exploration and production through to refining, marketing and distribution
of finished products. (Ref: 5)
The main sources of waste are: (Ref:13)
1.
2.
3.
4.
5.
6.
Large volumes of mud cuttings during the drilling phase.
Large volumes of “produced” water during production
Refinery waste streams
Crude oil transportation by tankers
Bulk Glycols
Tank washing / Oily water
4.1.1 Drilling Mud Cuttings
During drilling the cutter or bit rotates as it cuts the rock at the bottom of the well. We
pump a “drilling mud” down hole to lubricate the bit and keep it cool. Another of its
many functions and the one that concerns us, is its use to transport the “cuttings” or
bits of cut rock away from the face of the drilling bit and carry them to the surface. The
cuttings at the surface are inspected by a geologist, as they confirm the formation we
are drilling and importantly are usually the first signs we have of an oil bearing
formation.
Figure 1: Left shows drilling bit at the bottom of the well. In front are the cuttings. Right picture shows
the geologist examining rock cuttings bought to the surface. (Ref: 13)
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Management of the Environment in Sudan’s Oil Industry
Drilling mud is a mixture of water and bentonite clay (Fullers Earth). Other, chemical
additives are added to provide specific properties to the mud. The usual ones are
acrylamide polymers, barite, lignite and carboxymethylcellulose.
This all adds up to quite a toxic coating on the surface of the cuttings. Add the
presence of crude and the list of toxins increases.
The average well in the North Sea produces between 300 – 500 tonnes of
cuttings. (Ref:13)
In the UKCS, legislated discharge levels are set at 1% by volume of toxic coating on
the cuttings.
Re-injection of mud cuttings into a pilot hole has proved to be inadequate and difficult
to control. (Ref: 11). This is particularly applicable in highly faulted and fractured
reservoirs, found thus far in Sudan.
4.1.2 Produced Water
Produce water is the main environmental concern for the oil industry.
Since water and oil co-exist in the reservoir, both flow to the well-bore and are brought
to the surface. A reservoir engineer uses a number of methods to get the oil to flow
preferentially to the water although this is really only effective at the beginning of a
reservoirs’ life. Invariably water is always produced alongside oil.
The quantity of water produced at the surface increases with time and can reach 90%
of the total flow at the end of a reservoirs’ life. This is referred to as “water cut”.
Water lies below the oil in the reservoir due to the difference in specific gravity
between the two. It is chemically unlike ground or Artesian well waters, which come
from the relatively shallow, underground river waters. Currently, the reservoirs in
Sudan are between 9000-14000 meters from the surface. Consequently, the water
produced at the surface with the oil, carries heavy metals, trace minerals and other
toxic substances.
The reservoir fluid brought to the surface consists of a mixture of oil, water and gas. It
has to be separated into its constituent parts and this is the main function of a field
production unit; like the Heglig “Central Production Facility” (CPF). Generically they
can also be referred to as a “Gas-oil separation plant (GOSP). The function remains
the same: the separation of oil, gas and water.
The separated oil is sent to transport, usually via a pipeline. Some of the gas may be
consumed on-site to run pumps, compressors, rig engines and the camp services.
The remainder is vented or flared to the atmosphere although this practice is being
reduced world-wide.
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Management of the Environment in Sudan’s Oil Industry
A major part of a production facility is the water treatment process. After separation
the produced water undergoes treatment to remove the toxins. At the end of the
process, the “clean” water can be discharged into local water ways or overboard if
offshore.
Frequently, the untreated water is made chemically compatible with the original
formation water and re-injected into the reservoir. (note: the chemical composition of
the water changes as it is brought to the surface).This is mainly to maintain the
reservoir pressure and prevent the gas releasing from the fluid but can also be
performed to “sweep” the oil through the reservoir. However, only some of the
produced water is re-injected. Large volumes of produced water remain and have to
be treated for disposal.
As mentioned previously, water is always produced alongside the oil. The volume of
this water increases with time. Towards the end of a producing reservoir’s life, it may
produce more water than oil. i.e. increasing water cut.
There are two problems with the treatment of produced water:
1. The main one to note is the difficulty in choosing the correct size of water
treatment facility. Prior to production from a discovered reservoir, the reservoir
engineer builds a computer model to predict how much oil, gas and water will
be produced at the surface. We use a predictive method since we do not have
enough data on the properties of the reservoir and the contained fluids i.e.
geologic uncertainty. In particular, we can only predict how the fluids will
behave when we begin production via the collection of “historic” production
data.
The design engineer for the water treatment facility is given figurers on the
amount of water we predict will be produced and details on the chemical make
up of the water. Consequently, the water facility is designed to process a
maximum quantity of water e.g. 600, 000 barrel of water per day (bpd). The
maximum will be achieved towards the end of the reservoirs’ life. Usually, this
will be around 10-15 years after production begins. This could be earlier if the
built model has a lot of uncertainty in it and we get “early water breakthrough”.
The average field life for an oil well is 25-years.
The main issue to note is the difficulty the reservoir engineer faces in predicting
the maximum amount of water that will be produced. Invariably, most operators
underestimate their water production due to financial constraints, commercial
drivers or lax environmental policies. This leads to a dilemma when the
maximum quantity of produced water that can be treated is reached. The
operator is left with excess produced water that he cannot treat onsite.
Retrofitting of a larger water treatment is prohibitively expensive, especially
when compared to the value of fines that the host country can levy. In the
developing world this may be wavered for the sake of maintaining a positive
investment climate. Invariably, the excess produced water may find its way to
local rivers with or without resultant fines from the host government. In Sudan,
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Management of the Environment in Sudan’s Oil Industry
GNPOC’s central production facility in Heglig currently handles around 600,000
barrel of water per day. (Ref:6)
2. The second issue relates to the cultural difference between the companies that
are currently operating in the oil industry and in particular within the developing
world. Below we will discuss what the industry norms are. However, it is
important to mention here, that the agreed way between the international
community and the “oil majors”, for effective environmental management,
centres on self regulation and transparency. The IFC/World Banks states:
Although the World Bank has proposed environmental standards for most of
the industry’s operations, and major oil companies operating in developing
countries apply their own in-house norms, the protection these standards and
norms has provided is becoming less systematic as many smaller private
companies are beginning to operate in the hydrocarbon sector (Ref:4)
The “Offshore Oil and Gas Environment Forum” (OEF) is one of the initiatives
of the United Nations Environment Programme (UNEP). The OEF states:
“Companies should have, and behave according to, an integrated vision on
production, safety, health and environment, regardless of where in the world
they are active” (Ref:8)
4.1.3 Refineries
Refineries were one of the first targets for the environmental movement in the Western
world due to their high visibility and their practice of dumping waste to ensure viable
economics for the refinery. As a result of this early focus by the environmentalists the
refining industry has cleaned up its act and they are now one of the better industries at
managing their environmental impact. Consequently, this report will not cover the
refining sector. Industry figurers for the reduction of emissions from refineries are as
follows :




refineries now recycle 62% of refinery residuals versus 26% in 1985
21% of refinery residuals are treated to reduce their volume and/or toxicity
before disposal
refinery residuals sent for direct disposal fell from 28% in 1985 to 18% in 1997.
EU refineries have reduced aqueous effluent by 97% since 1970 and SO2
emissions by 40% since 1980
(Ref:5)
4.1.4 Tankers
Another industry sector that has previously achieved notoriety amongst
environmentalist is shipping. Tankers are by far the most common way that oil is
transported. The practice of dumping oil contaminated water following cleaning of the
tanks, has mainly abated due to environmentalist pressure through out the 1960’s and
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Management of the Environment in Sudan’s Oil Industry
‘70’s. Monitoring and enforcement by international maritime bodies is effective and
sophisticated. (Ref:10)
Regarding Oil spills, the IFC/World Bank states:
“Oil and petroleum products spills, and gas leakage are common and can cause
serious damage to the local and global environment. There is urgent need to develop
prevention policies (and) clean up procedures, as part of regulatory regimes” (Ref:4).
Figure 2: Graph showing decline in oil spillages from world-wide tanker fleets (1970-1992) (Ref:10 )
Sudan’s main lifting terminal is Al Bashayer located at the country’s only port outlet:
Port Sudan on the Red Sea.
Since most oil is transported by tankers, the oil industry has developed the concept of
a regional rapid response system for potential oil spills. These are formed and
financed by a collection of oil companies that operate tankers in a shared water way.
For example the Arabian Gulf has the “Regional Clean Sea Organisation” (RESCO)
founded by 13-members. The equipment, chemicals and personnel needed to clean
up and manage an oil spill are made available to any of the members from regional
centres. Similar industry initiated organisations exit in the : North Sea; Gulf of Mexico;
Caspian Sea and other producing areas The cost of establishing this system, is
not only shared by the members but they also have provisions to reimburse
costs incurred by the member, following an oil spill. (Ref:16 )
4.1.5 Bulk Glycols, Tank Washing & Oily Water
World-wide, average reservoir temperature varies between 90 – 130 degrees
centigrade, depending on the depth. The crude oil currently being produced in Sudan
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Management of the Environment in Sudan’s Oil Industry
by GNPOC, CNPC and Petronas, is considered heavy oil. What this means is that the
chemical make up is dominated by the medium to heavy parts of the hydrocarbon
chain. E.g. paraffin’s and asphalt. Both of these tend to harden unless kept hot.
The main oil pipeline in Sudan is heated and chemical “pour point depressants” are
added to the separated crude oil, to help prevent it solidifying whilst in transit. These
chemicals are glycols or methanol’s which are recovered at the final destination and
reused.
After the crude oil is separated at the production facility, it is left to settle in open
storage tanks, similar to those seen in tank farms but importantly without the floating
roofs. Because they are open to the atmosphere we call them “atmospheric” or settling
tanks. From these tanks the crude is pumped through the pipeline. Periodically, they
need to be washed and cleaned, using special detergents and lots of “elbow grease”.
Most production and drilling equipment needs to be cleaned and washed as part of
their maintenance programme. This cleaning process invariably produces vast
quantities of “oily” or “dirty” water. How this is disposed and to what standards, is
the main environmental concern.
4.2 Conclusions:
It goes without saying that all the waste, that is an inevitable outcome of the drilling
and production processes, ( including drilling cuttings, produced water, spills and oily
waste), require an auditable, transparent and closed, licensed system of
environmental management.
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5 Current Methods in Environmental Management
There are two agreed methods to regulate environmental performance: (Ref:8)
1. Prescriptive or Command and Control (CAC) methods
2. Performance based or Market Based Initiative (MBI) method
5.1 Prescriptive or Command and Control (CAC) method
The prescriptive or CAC method is the one most people think of when they consider
environmental monitoring.
The host government provides industry with a set of environmental figurers and
requirements to be met. Through technical discussions and meetings between the
government and the company, an understanding is reached as to what is required.
This provides the government with legal certainty. The company may or may not seek
ISO 14000 certification. [see following section on ISO].
Periodically the governmental agents visit the company’s site and take pollution level
measurements as part of their inspection.
Although this CAC method may work in most developing countries, it fails to deliver in
the developing world due to the following:
1. The government enforcing agency is usually under funded and has limited
technical capabilities.
2. The political pressure that some ministries can exert on waiving environmental
concerns can undermine the work of the regulators. This is particularly true if
the investment is seen as strategic by the government.
3. Relationships built between the company and the government inspectors can
yield unpredictable enforcement across the industrial sector.
4. Weak judicial institutions at a regional and national level can also induce
unpredictable enforcement and undermine the findings of the government
inspector.
The above issues illustrate the point that CAC methods are near impossible to
implement in the developing world. It was also found wonting in the industrialised
world since it produced an adversarial relationship between the government
agency’s and the company. The oil industry in particular was concerned about
pandering to non scientific or justifiable environmental issues regarding their
operations. (Ref:5)
Consequently, the oil industry undertook an alternative, voluntary route that
involved them being transparent about their environment performance. The main one
that oil companies use, is an environmental management system (EMS), provided by
the International Standards Organisation, ISO 14000.
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5.2 Performance based or Market Based Initiative (MBI) method
To address the environmental issues in the oil industry, the United Nations
Environment Programme (UNEP), the United Nations Commission on Trade and
Development (UNCTAD) and the oil industry, formed the “Offshore Oil and Gas
Environment Forum”. (Ref:8).
At an experts meeting in 1997, they defined performance based initiatives as:
“Performance based approaches place a greater emphasis on setting an objective or
goal to be reached by industry. An example is a legally binding environment plan or
covenant that is subject to reporting and auditing requirements…….If voluntary action
is effective, there is less need for regulations. These measurers can include codes of
practice, agreed action plans or negotiated targets and limits. Self regulation, an
example of a performance based approach, is an agreement made between the
operator and government with specified environmental standards. It is the
responsibility of the operators to define strategies on how they will achieve these
standards and provide evidence to assure they are complying with the agreement.”
One type of performance based system, used extensively by the oil industry is the ISO
14000 EMS system.
5.2.1 Environment Management Systems (EMS)
The oil industry is capital intensive. Hence the oil companies require their suppliers to
meet a certain standard in the way they manage and run their business.
The organisation that is tasked with providing generic world-wide standards in
business management is the “International Standards Organisation” (ISO), based in
Switzerland. ISO has superseded the “British Standards Institute” (BSI). The first
management system that companies have to meet is the ISO 9000 series. This
ensures the supplier has a written management system, including: health and safety
and quality control.
In addition to ISO 9000 almost all companies are required to have a written
“Environmental Management System” (EMS). This is known as the ISO 14000 series.
We refer to them as a series since they have many elements that you select based on
your type of business. For example, ISO 14040 relates to what you should do to
assess the impact on the environment that your product has during its life cycle. The
car maker BMW boasts that its cars are 80% recyclable after the end of their useful
life.
An EMS can be defined as follows:
“Environmental management is about taking a systematic approach to minimising your
company’s impact on the environment and surrounding community. Moving away from
ad hoc processes gives you an overview that makes your environmental programs
easier to manage, measure, and improve.” (Ref:9)
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Management of the Environment in Sudan’s Oil Industry
The main elements of ISO 14000 are: (Ref:9)
1.
2.
3.
4.
5.
environmental policy
planning
implementation & operation
checking & corrective action;
management review.
Figure 3: Schematic representation of the ISO 14000 EMS system and some of its typical components.
(Ref: 9)
For a prospective company to achieve ISO certification it must employ an authorized
and accredited consultant. This can be an individual or a company like DNV, ABS and
Lloyds. The consultant reviews the company’s environmental procedures and
processes and highlights areas that fall short of international best practice standards.
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Management of the Environment in Sudan’s Oil Industry
The company is then left with the task of compiling its own EMS, incorporating their
own solutions for the areas highlighted by the consultant. Following this the consultant
returns to perform an environmental audit of the company and reviews their written
EMS. A successful audit is rewarded with a certificate for ISO 14000. Each certificate
is valid for 3-years.
In essence, ISO 14000 certification provides proof that a company has a written EMS
and is working towards reducing the environmental impact of its business.
The shortcoming lies in the fact that, the consultant never makes an actual
measurement of the pollution levels that the company’s processes make.
He merely checks whether they have a system for making their own measurements as
part of his audit. With the company left to make its own measurements and report
those to the authorities, conflict of interest becomes an issue to consider. In addition,
they do not offer solutions to the company for the areas, highlights in need of
attention.
Most large companies provide their own solutions, others could use outside
consultants, who may be politically weak, within the company.
This shortcoming in the ISO 14000 system has led most of the oil majors to seek
additional, voluntary standards such as the European “Eco Management and Audit
Scheme” (EMAS).
A major part of EMAS centres on “providing relevant information to the public” as part
of their transparency initiative. However, it relates only to companies operating in the
EU. (Ref:9)
5.2.2 Program for Pollution Control Evaluation & Rating (Ref: 2)
In the early-nineties, Indonesia faced similar problems regarding rapid industrial
growth, weak environmental policy and an ineffective judiciary. The government
agency tasked with environmental management in-country was BAPEDAL
(Environmental Impact and Management Agency).
BAPEDEL made a study into existing environmental control mechanisms and
discovered their shortcomings. They compared the development of CAC and
performance based initiatives in the US, Europe, Philippines, India and Indonesia.
Their results were tabulated as follows:
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Management of the Environment in Sudan’s Oil Industry
Key Components
Environment
Specific
Regulations
National Legal
System
Public
Accountability
Technical &
Financial Capacity
Readiness for
CAC and MBI’ s
US, Europepre 1970
Weak or
didn’t exist
US, Europe- IndonesiaIndia,
70/80’s
Current Philippines
Strong
Moderate
Strong
Strong
Strong
Weak
Strong
Strong
Strong
Weak
Weak
Inadequate
Adequate
Inadequate- More or less
Moderate
adequate
Required
environmental laws,
technical & financial
capacity
Ready to
enforce
effectively
Requires
Requires
broader
stronger
legal
political will
reform &
political will
Figure 4 : Comparison of Key Components for Implementation of Command & Control and Market
Based Initiatives (Ref: 2)
In addition, the study identified 4-key requirements for successful implementation of
either a CAC or performance based initiative: (Ref: 2)
1. The environmental regulations must be good
2. the overall legal system should facilitate enforcement
3. Judiciary and public agencies should have the political will to undertake
credible enforcement
4. Environmental agencies must have adequate financial and technical
capacity.
By the 1980’s the OECD countries had effective environmental policies and monitoring
programmes, due mainly to them being strong in the “key components” tabulated
above e.g. “Readiness for CAC and MBI’s”.
BAPEDEL soon realised that to have an effective environmental system in-country,
required not only specific regulations but also a strong National Legal system and
Public accountability. Technical and financial capacity was an issue but was
achievable. However, the required legal reform and political will, required a long time
to implement. Particularly for developing countries, where transparency by the
Government is still viewed with suspicion.
In addition they also noted the following:
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Management of the Environment in Sudan’s Oil Industry
1. Although the OECD countries had managed to implement effective
environmental systems by using CAC or MBI’s, the cost of establishing and
maintaining either was prohibitive for developing countries.
2. Public accountability was an important driver for successful implementation in
the OECD countries. This can be further illustrated by considering India. The
country had learnt from the experiences of the Union Carbide Bhopal disaster
in the early 1980’s, and had strengthened their legal system. Lack of public
accountability was felt to be the main issue which had prevented them
implementing an effective environmental system.
3. Broad legal reform and political will were needed to successfully implement an
environmental system that used either CAC or MBI’s methods. Both required a
long time to change in the developing countries.
Clearly a better way was needed.
5.2.2.1Objectives of PROPER (Ref: 2)
BAPEDEL began by setting clear objectives for implementing a suitable environmental
system:
1.
2.
3.
4.
5.
It should promote compliance with regulations
Encourage pollution reduction beyond compliance
Create incentives for environmental management system (EMS)
Develop a culture for eco-labelling and green marketing
Develop foundations for ISO 14000
To meet these high expectations, they decided on two issues:
1. Expand the range of stakeholders to include external candidates.
2. Use public disclosure both to name & shame failing companies and instigate
public praise for those companies who meet or exceed compliance.
“The underlying idea was to disclose environmental ratings of industries to the public
and let honour and shame compel polluters to change.”
Three important external stakeholders were identified:
1. non-governmental organisations (NGOs); including environmental pressure
groups
2. local and regional communities
3. the press and media
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Management of the Environment in Sudan’s Oil Industry
These stakeholders could be empowered by providing them with information obtained
through BAPEDEL’s role of regulation and inspection. By empowering these
stakeholders the following could be attained:
1. They would become powerful allies and help change the behaviour of polluting
companies.
2. They help strengthen BAPEDEL as an institution.
3. The public support would give it strong political incentive for enforcement.
4. Help to galvanise private sector support, by recognising business that outperform their peer group.
5. Information on environmental performance furnished to local communities and /
or NGOs operating in rural areas, will help strengthen the informal mechanisms
through which pollution behaviour can be changed.
The following diagram helps illustrate these points:
Public Disclosure
NGO’s
Communities
Media
Government
Business
Empower NGO’s
with superior
information
Legitimise public
perception about
pollution
Promote social
responsibility
& educational
journalism
Influence
environmental
decisions in
other agencies
Establish credibility
& strategic alliance
Figure 5 : PROPER System introduced – How to create public demand for a cleaner environment? –
Empower external stakeholders (Ref:2)
5.2.2.2Measurable Rating Indicators
To make such a novel system work requires both credibility from the regulatory body
and a systematic and transparent way of collecting and assessing data. Naturally, the
collection of accurate data is paramount in constructing the categories for award.
The mechanism developed by BAPEDEL is discussed fully in the paper quoted in the
reference list. (Ref:2). A bespoke computer programme was developed to store and
compare data.
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Management of the Environment in Sudan’s Oil Industry
The main issue centred on maintaining the credibility of the regulatory authority and in
particular the information provided to the external stakeholders. Transparency and
security during collection and analysis of the data was felt to be the key.
Five measurable environmental indicators were chosen as suitable for comparing
across different industries:
1.
2.
3.
4.
5.
Emission Levels
Resource Efficiency
Behavioural Variable (management effort levels)
Public Complaints
Ambient Quality (air and water)
These would be analysed, compared and reported in a manner similar to the Financial
Statements produced by companies. Based on the results, each company was given a
colour rating.
Gold
Public Praise
Green
Blue
Red
Public Pressure &
Legal Enforcement
Black
Figure 6 : Colour Coded Incentive Scheme for Environmental Performance (Ref:2)
A screening system was introduced prior to publishing the results. The reports were
presented first to an advisory body consisting of : NGOs, public figurers, businesses
and other government agencies. They were then endorsed by the Minister of
Environment and finally they were presented to the President of Indonesia.
By achieving endorsement at the highest level, the scheme obtained strong
political clout and signalled the government’s commitment to environmental
issues and the scheme.
The results were finally presented at a public event that received wide coverage in the
media.
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Management of the Environment in Sudan’s Oil Industry
5.2.2.3 Impact of PROPER on Pollution Levels
The PROPER system was introduced in Indonesia in 1995. Within a period of less
than two-years the following results were observed:
1. “Based on the key indicator of water pollution, BOD, the average
concentration per factory in the effluent stream declined by 43 percent
between 1995 and 1996.
2. From a total of 187 factories, compliance with regulations improved from 35%
to 51%.
3. Administrative efficiency for running PROPER was calculated for each factory
to be around $10-15 USD per percentage point reduction in water pollution. (i.e.
$400-$460 per 43% reduction per factory)
5.2.2.4 Comparison of PROPER and ISO
ISO 14000 ensures a process is implemented for achieving compliance with
regulatory requirements and that a management system is in place for monitoring
environmental impact. It does not provide a means to measure improvement in
performance and does not differentiate well between meeting and exceeding
regulatory requirements.
The following figure best illustrates the difference between PROPER and ISO.
Gold/Green/Blue
ISO 14000
Certified
Good Performance and
consistent with ISO 14000
ISO 14000
Not
Certified
Good performance but no ISO
14000
Either not interested in ISO or
weak relationship between ISO
requirements and performance
Red/Black
Poor performance but ISO
based processes in place
Easier to get ISO than to
comply
Performance and ISO are
consistent
Management Process Quality (ISO)
Output Based Performance (PROPER)
Figure 7 : Table of Comparison between PROPER and ISO Systems (Ref: 2)
5.2.2.5Concluding Remarks on PROPER
The implementation of PROPER was a success in Indonesia and it provides a
workable, cost effect means of developing an environmental culture within the country.
Although the mechanisms for its success are not readily understood, the resultant
reductions in pollution levels are indisputable.
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1. PROPER offers a viable model for policy modernization in developing countries
2. Informational incentives are important motivators of environmental
improvements
3. PROPER combined with CAC and MBI’s can produce superior results
compared to CAC or MBI alone
Whether this is a suitable system for Sudan to implement needs to be studied further.
However, our impression is that most of it can be made applicable. The main concern
is the requirement for data gathering and the quality of the data obtained.
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Management of the Environment in Sudan’s Oil Industry
6
Conclusions for Sudan
1. All methods currently in use by governments in implementing a fair, efficient
and workable environmental policy have their limitations.
2. The Sudan is undergoing rapid economic development and industrialisation
and the need for a workable policy to protect the environment for future
generations, has become imperative.
3. The rapidly expanding extractive industries need particular attention for their
propensity to inflict environmental damage on a vast scale. Consequently, we
believe this sector should be ring-fenced and a special approach be taken to
manage their environmental impact. The ring-fence can also include other
capital intensive projects similar to the Merowe Dam. Special Waste
management companies can be approached to establish the required handling
plants in-country.
4. The traditional command and control (CAC) methods are expensive to set up
and operate. In addition, they intrinsically develop an adversarial relationship
between the regulatory authority and the inspected plant.
5. ISO 14000 is the most widely recognised environmental management system.
It ensures that the plant has a written management plan or system for handling
the environmental impact of its business. Since the solutions to meet regulatory
requirements are the responsibility of the plant, ISO 14000 invariably produces
a mind set, to just achieve compliance with the set emission standards.
6. In addition to ISO 14000 certification, performance or market based initiatives
have become the norm for most large to medium sized organisations in the
developing world. The solutions to environmental issues at a plant are still the
responsibility of the owners. However for such voluntary based methods to
work the organisation needs to seek the opinion and involvement of external
stakeholders, so that an optimum solution is achieved.
7. A market based initiative (MBI) that harnesses public praise or vilification
towards companies, is a good way of developing a culture of meeting and
exceeding regulatory standards. However, to work correctly they require:
political support at the highest level; suitable technology: a merit based public
award system.
8. MBI has been successfully implemented in Indonesia and have produced rapid
results. They are particularly effective on industrial sectors that have a low
tolerance to reputation risk and public image.
9. International organisations and countries can provide funding and advice for
developing a workable environmental policy in Sudan. In particular the UNEP
and World Bank have a wealth of data and experience on countries that have
faced a similar task.
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6.1 Recommendations
1. Ensure the use of modern reservoir management technology and methods
including water flooding, EOR, multi-later well, Smart wells, etc. In short
maximise the level of technology used in the oil industry especially in
environmentally sensitive areas.
2. Develop contact with International organisations and other oil producing nations
for capacity building, benchmarking and suggestions e.g. the UNEP, World
Bank and the Norwegian Environmental Assistance Programme. (Ref: 12).
3. Environmental impact control in the oil industry should be managed by the
Ministry of Energy (MoE), perhaps under the auspices of the Ministry of
Environment. This is because the MoE have the personnel at hand with oil
industry experience.
4. The conflict of interest in the role that the Ministry of Energy performs; between
mineral license award and monitoring the industry should be addressed. We
also recommend establishing joint venture companies with waste management
specialists, who can install and run suitable handling plants.
5. The MoE should consider sharing the risk that the operators face when making
decisions centred on environmental issues. The Norwegian oil industry has the
leading model in shared risk with the oil companies.
6. The international waste management business, where industrial and consumer
waste is sent to the developing world for processing and disposal, needs to be
prevented from entering the Sudan. A government licensed scheme should be
introduced whereby only approved plants are allowed to handle in-country
waste. International waste processing should be banned from the onset.
7. Maximise the reuse and recycling of oil industry supplies and their packaging,
e.g. steel drums, plastics, office and camp waste, etc.
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7 References
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UNDP National Workshop on Land Rights, held at Sudanese Banks
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Rating: A Model for Promoting Environmental Compliance and Strengthening
Transparency and Community Participation in Developing Countries”.
International Resources Group, Washington DC, USA. Retrieved December 6,
2005 from http://irgltd.com
3. Awad, A. M. Salih, (2000), Forestry Outlook Study for Africa, Sudan,
Government of Sudan, Ministry of Agriculture and Forests, Forests National
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slide presentation made at the Ministry of Agriculture and Forestry, Khartoum,
Sudan on December 7, 2005.
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(2006), World Bank, Washington DC, USA. Retrieved on March 2006 from
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36930,00.html
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beyond- Contributing to sustainable development, International Petroleum
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after Independence, unpublished paper received from author on January 20,
2006.
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Resources and Environment, Nairobi, Kenya. April, 1999.
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Management of the Environment in Sudan’s Oil Industry
10. Gill, L., (2005). Clean Oil from Water. Corporate Knights-Waterlution, Water
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Management of the Environment in Sudan’s Oil Industry
22. Sudan Transition & Recovery Database, Northern Leech, Version 3, August
2005, UN Office for the Coordination of Humanitarian Affairs, Retrieved on 19
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