A/HRC/40/CRP.1 producing areas at times when mass human rights violations were perpetrated against the local population, and which in various ways were complicit in these crimes. b) Current oil production situation The withdrawal of western companies for reasons mentioned above, and associated with both the security and political situation in the oil areas, led to a gradual influx and subsequent takeover of the oil production by Chinese, Indian, and Malaysian companies.965 These companies have led the oil exploration in South Sudan from the moment it gained independence in July 2011. The country has since been described as one of the most-oil dependent countries in the world,966 with oil revenues making up over 80 percent of the country’s total income,967 or according to some sources, even higher rates.968 However, levels of productivity have dropped from an estimated 350,000 969 to 480,000970 barrels per day (bpd) just after the country gained independence in 2011 to 130,000-150,000 bpd in 2018.971 This decline in output, combined with sharp fluctuations in oil prices,972 meant that South Sudan’s major source of revenue for most of its existence has been extremely unreliable, with dire consequences for the country’s economy. 973 Even aside from the vagaries of international oil pricing, net profit from its oil is severely limited for South Sudan due to a complex scheme of payments it must make to its neighbour Sudan under the terms of the Agreement on Oil and Related Economic Matters, which is part of the Cooperation Agreement between Sudan and South Sudan providing for the implications of the secession of South Sudan.974 The payments, which included a Transitional Financial Arrangements (TFA) payment of USD $3,028 billion, 975 were agreed in part to cushion the adverse impact to the Sudanese economy of the loss of up to 90 percent of its oil revenues as a consequence of the key oil producing areas going to the South with the secession. This was in line with Article 1 of the Cooperation Agreement, by which the parties committed themselves to establish ‘two viable states’ (Sudan and South Sudan) notwithstanding the secession of the South.976 These payments also include the cost of 965 Patey, L., The New Kings of Crude, China, India and the Global Struggle for Oil in Sudan and South Sudan, 2014, pp. 78-141. David K. Deng, “Oil and Sustainable Peace in South Sudan”, South Sudan Law Society, February 2015, citing Revenue Watch, Resource Governance Index. South Sudan Overview (2013). 967 World Bank, “South Sudan Economic Update”, July 2018. 968 According to South Sudanese Minister of Petroleum Ezekiel Gatkuoth, 90 percent of South Sudan’s economy is based on oil, Al Jazeera, “South Sudan holds oil conference to boost industry”, 21 November 2018. In early 2012, the Petrodollar reportedly made up 98 percent of South Sudan’s revenues: Luke Patey, The New Kings of Crude, China, India, and the Global Struggle for Oil in Sudan and South Sudan, 2014, p. 231. 969 Seik, Edris H. Kebret, Haile and Abdi, Ali Issa, “The State of the Political Instability and Its Impact on Trade in South Sudan: A Critical Assessment”, Unpublished paper by the Horn Economic and Social Policy Institute (HESPI), Addis Ababa, Ethiopia, 2017, p. 10. 970 According to Ezekiel Lol Gatkuoth, Minister of Petroleum of South Sudan, the country used to produce 480,000 barrels a day (before the ‘crisis’ of 2013), which was reduced to between 130,000-143,000 barrels a day currently, (54 Etats: ECONOMY: Interview with Ezekiel Lol Gatkuoth, Minister of Petroleum in South Sudan, 1 March 2018. Retrieved at https://www.youtube.com/watch?v=elxNkHadFjQ. 971 Presentation by Sudanese Minister of Petroleum at Africa Oil & Power Conference, Juba, November 2018. 972 United States Energy Information Administration, Crude oil volatility decreases as prices rise from early 2016 levels, 10 May 2016; World Bank Group, The Great Plunge in Oil Prices: Causes, Consequences, and Policy Responses, Policy Research Note by John Baffes, M. Ayhan Kose, Franziska Ohnsorge, and Marc Stocker, March 2015. 973 Gross domestic product is divided in nominal and real GDP: the former is made up by adding consumption expenditures (by the government and by private households), plus gross and government investment, plus the difference between exports minus imports of a country. The real GDP reflects the growth by subtracting inflation and deflation from the nominal GDP. While current domestic data on the South Sudan’s GDP is not available, in 2016, oil exports made up 26.4 percent of the GDP (compared to 65 percent in 2011). In addition, oil made up 94 percent of the export of goods and services for 2016 (compared to 97 percent in 2011). Republic of South Sudan National Bureau of Statistics, Release of South Sudan Gross Domestic Product (GDP) Estimates for 2016. 974 Cooperation Agreement between the Republic of Sudan and the Republic of South Sudan, Addis Ababa, 27 September 2012. 975 Agreement between the Government of the Republic of South Sudan and the Government of the Republic of Sudan on Oil Related Matters, Addis Ababa, 27 September 2012, Article 4.4.1. 976 Cooperation Agreement between the Republic of Sudan and the Republic of South Sudan, Addis Ababa, 27 September 2012; It was envisaged that these payments and arrangements would be completed within 3.5 years, according to Article 22 of the Agreement between the Government of the Republic of South Sudan and the Government of the Republic of Sudan on Oil Related Matters, Addis Ababa, 27 September 2012. 966 126