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Financial Times

Aggrey Majok raps the corridor wall within his south Sudanese university and listens like a piano tuner as it returns a dismaying metallic clang rather than the reassuringly dull thud of concrete.

Shaking his head, the professor blames the building’s frailty on an unusual and unhappy deal under which his institution was created by an oil company from just beyond the European Union’s eastern reaches.

“They are poor quality,” he laments, gesturing to the red-painted rooms of the courtyard around him. “They cannot last for ever.”

The short but turbulent relationship between the Moldovan company Ascom and Prof Majok’s Dr John Garang Institute of Science and Technology is a cautionary tale of how oil companies’ social projects can go awry, particularly in countries where there is little transparency. The initiative to build the university – supposedly a gesture of Ascom’s goodwill to the remote and impoverished area where it is hunting for crude – has instead dissolved into accusations that the company has paid too little attention to local needs and wishes.

The story of the institute is a tiny but telling example of how a growing international class of opaque and largely unsupervised oil companies – from small operators such as Ascom to large Chinese and Russian multinationals – risk becoming agents of conflict in unstable countries such as Sudan.

As Rosie Sharpe, author of a report on Sudan’s oil industry published last year by Global Witness, the campaign group, puts it: “Companies are key players in a drama that, if the oil wealth is not fairly managed, could end very messily indeed.”

Sudan’s secretively run 500,000-barrel-a-day oil industry has – since the formal end of civil war in 2005 – been mostly the domain of enigmatic wildcat outfits such as Ascom and big Chinese businesses that are helping to satisfy Beijing’s ever-growing hunger for crude. Ascom’s owner, Anatol Stati, is one of the richest businessmen in Moldova, where he has been involved in a protracted feud with Vladimir Voronin, the president.

Unfortunately for Ascom, its attempt to build a place of learning in one of the poorest and most remote areas of the world seems to have produced more rancour than respect. Professor Majok says the wrangling over the adequacy of the two-year-old Garang institute outside the town of Bor has been so intense that the complex shut down for seven months last year.

On a tour of the institute, Mr Majok passes a library with no books, on his way to a sports pitch rendered almost unusable by husks of maize like those drying on great racks nearby. He gestures to a clump of tents where the students sleep.

“These are the so-called ‘hostels’,” he says.

He gives equally short shrift to the subjects offered by the teachers imported by Ascom from Moldova. He scoffs at the irrelevance of courses in pharmaceuticals technology and in forestry and public gardens to a subsistence society trying to recover from a 50-year post-independence history dominated by war.

“We are not going to eat gardens,” he says.

The question of who ultimately ends up paying for the institute is also moot. Prof Majok and Kuol Manyang Juuk, the governor of the surrounding state of Jonglei, say they have been told that south Sudan’s semi-autonomous government is liable to pay back the $2.5m (€1.8m, £1.6m) construction costs to Ascom but both add that they have not seen any contract confirming this to be the case.

The mystery does not end there: officials at the south Sudanese oil ministry declined to be interviewed, as did Ascom. Neither the company’s spokesperson in south Sudan nor its head office in Moldova responded to requests for comment.

Ascom instead referred the Financial Times to Gabycon, a Moldovan construction company that built the Garang institute.

Gabycon’s camp outside Bor was guarded by south Sudanese former rebel soldiers lounging in camouflage gear on a metal bedstead.

Grigore Talpa, the company’s director-general, explained he was unaware of the complaints about the institute and found them “surprising”.

The apparent unravelling of an oil industry community project away from the public gaze is hardly unique to Sudan or to wildcat companies. Western multinationals have been heavily criticised for years for their records on pollution and social development in little-visited regions of countries ranging from Nigeria to Ecuador. Yet – thanks to pressures ranging from stock market disclosure rules to nongovernmental group campaigns – little bits of stories can sometimes be pieced together. Even such limited checks on behaviour are scarce or nonexistent in the cases of many small oil businesses, or of the resource companies from China and other emerging economies that are increasingly active across the world.

For now, Prof Majok is trying to pick up the pieces from what has been, whatever the full story, a chastening encounter with the murky world of oil.

“Maybe the problem is with us,” he reflects. “Because we were not very careful about what we were getting.”