Report 68 – Testimony of Tim Sarney
Timothy Sarney was the drilling and operations manager for Lundin Oil from the time the company commenced the Sudan project in 1997 until the company sold to Petronas in 2003. Sarney testified about a relatively calm operation, with occasional incidents relating to safety – a stark contrast to other testimonies the court has heard up until today.
Day 1 – Technical office in Geneva, the move to Khartoum, construction & security
Prosecutor Ewa Korpi commenced the examination in chief with the usual opening question: tell us about your background and relevant experience. Tim Sarney had worked in the oil industry long before he was hired by IPC (later Lundin Oil). He listed a number of countries in which he worked throughout his career, including Yemen, Oman, Malaysia, Iraq, among others. He joined Lundin Oil in 1991 with a background in engineering. At the time, the requirements weren’t as stringent as they are today. Before he moved to Khartoum in 2001 with his family, he spent time in Lundin’s Dubai and the Geneva offices, where he worked together with Ian Lundin and Alexander Schneiter, who held the positions of general manager and exploration manager. In 1999, the Dubai office moved to Geneva. Sarney moved to the technical office with Alexandre Schneitre, Keith Hill, Michael Webb and others while Ian Lundin moved to the chairman’s office. From the Geneva office, Sarney managed the drilling operation in Sudan. Due to the infrequent nature of the work, the on-site drilling team in Sudan was comprised of consultants.
Between 1997 and 2001, prior to his move, Sarney would mainly report directly to Ian Lundin, but Schneitre would be “in the loop” because he was the head of the technical office. Sarney himself was the drilling and operations manager and managed the drilling operations, including logistics and production, and related budget. Security concerns or questions were Keith Hill’s area of operations. Although the reporting structure was “loose”, Hill was Sarney’s point of contact in the Sudan project. The rig attack in 1999 was the first time security was of concern, Sarney explained. Prosecutor Korpi asked Sarney about the company’s internal reporting chain and who was above Keith Hill. Sarney explained to the court that he could just go to the relevant person and ask a question or discuss an issue. Outside of the Geneva office, Sarney received daily reports from the rig during the preparation phase, when the rig was moved to the well site. According to him, these reports were sent to both Geneva and Dubai and “whoever was interested could read them.” Sarney explained that the camp manager would report to the Khartoum office, however, wasn’t able to expand further. The reports would contain information about the ongoing phase of operations which meant that seismic and drilling would be reported upon at separate times, but they were always technical. He would also receive daily reports if there was construction underway about any logistics relevant to operations.
The prosecutor asked for more information about who could have received the reports and what they might have contained, but Sarney told the court that he was the wrong person to ask, saying “Wasn’t Ken Barker here last week?” Korpi told Sarney that Barker had testified about compiling reports he would send on Sundays, which would be the basis for a telephone meeting on Mondays. Sarney, however, did not recall having telephone meetings, but told the court that that he remembered the reports because he would compile information received from field staff.
Construction and Infrastructure
Sarney testified that he would receive reports regarding drilling and construction. This would include any type of construction, including roads, water wells, clinics and schools he said. Prosecutor Korpi asked him to expand on his knowledge of the various roads that were constructed during his time in Sudan. The all-weather road has been an important and contentious topic throughout the trial because of the alleged murder and displacement of civilians that occurred in order for the the road to be built.
Sarney explained that prior to the oil discovery in 1999, they had used a dry weather road. After the oil discovery, they needed to be able to operate year around and therefore required an all-weather road. The operational area was located in a swamp that was under water for the larger part of the year. David Johnson, Archer, another man named Garret, Heglig construction company reported to him while he was in the Khartoum office. Dr Alan Bagi was the local general manager whose main role was to liaise with OEPA and the relevant Sudanese government ministry.
Relevant information from the daily reports would be summarized and compiled by Sarney and Barker and sent to Geneva on Sundays.
Move to Khartoum 2001
Tim Sarney and his family moved to Khartoum in September 2001. In the office with him was managing director Ken Barker, general manager Gordon Smith, and a logistics- and financial manager. There were geologists and geophysicists present and Dr. Bagi was at the time the military liaison. Sarney said El Haytan was the assigned security. When the prosecution asked about the security situation in the Block, Sarney said that security was not an issue in the block prior to the rig attack in 1999. In response to whether he knew about the ongoing civil war, he again reiterated that he was not aware that it posed a threat to the operation in the block.
In 2001, security was provided by Sudanese national security and Petroleum Security. HSE staff were initially based in Khartoum but after the completion of the first well, they moved to Rubkhona and the drilling site. HSE staff would liaise with PetSec to find out about potential issues to operations and staff. Captain Rati was in Rubkhona during this time; he had been seconded from PetSec and Sarney testified that the company “had no choice.” He was later replaced by El Haytan. Sarney told the court that prior to Captain Rati, Mohammad Moktar was seconded to their operations by the Talisman group. This was because the government did not like the way they operated. Other companies in Sudan would work very closely with local security in their community development projects. Sarney explained that they did not want PetSec too close to their operations, but they wanted to “take over.” The Ministry of Energy and Mining had also expressed dissatisfaction when the company suspended operations after a security incident involving shots being fired. This had been Sarney’s decision as he assumed Ken Barker’s role while Barker was not in Sudan.
Sarney explained that he read the HSE reports every day and compiled all relevant information into weekly reports. Included in these reports was information from the OCM, TCM and JCM. The reason he did so was because the company was “spending lots of money every year and not achieving very much in the work programs” and the stakeholders wanted to know why. Sarney was unable to confirm who would be the recipient of the weekly reports, telling the court that serious or significant information would be forwarded to Geneva but he did not know who the recipient of the information would have been.
There was an information exchange between the blocks and other entities, Sarney explained. He would speak with Mark Reading and Mark Dingley from Talisman in the adjacent block. He would also keep in contact with the UN security department and the British embassy. Although he couldn’t recall specific information that was exchanged, he remembered that the UN wanted to know more about Block 5A for the purpose of their food program. Reading and Dingley visited the Block but Sarney did not want them moving around in the block because GNPOC, their security, approached their collaboration differently. He testified that they would receive intelligence from other sources, likely PetSec. GNPOC controlled where and how Talisman operated their community development project, he said, and PetSec was “part of that.” Sarney did not expand on these recollections before the first day concluded.
Day 2 – Budgets, security issues
Day two commenced with Tim Sarney explaining the technical aspects of his work and the project budget. The exploration department would decide what work they wanted to conduct for that year. Sarney’s responsibility was to figure out where they would build wells and the logistics related to construction. He would also work out the costs of the construction planned for in the work program. The exploration department would do the same for seismic, and the finance department would work out the costs for running the office. All departments would then combine the final costs, and this would be presented to and discussed with the partners prior to commencing.
Sarney described the wells in Sudan as “simple versions.” They would drill a well between 1,500 – 2,000 meters down, which was considered shallow compared to other places where a well would be drilled between 6,000 – 7,000 meters down. It was a huge logistic construction exercise, he said. The pipeline they laid in Heglig was 1,700 kilometers long and the oil field was 900 kilometers away from Khartoum. The closest gravel road was 200 kilometers away.
The logistics manager in Khartoum would have had significant input on the budget and seismic. When it came to moving equipment from the north down to Rubkhona, there were helicopters, cranes, trucks and planes involved. The logistics manager in Khartoum was previously at Chevron. The HSE staff were paid a set amount each day, making them easy to budget for. Prosecutor Wennerström queried who had the final say prior to a work program was presented to the partners. The management of the company would jointly approve the programs before they were presented. After 2001, the work program would go through Khartoum and then in Geneva. “It was already run by the partners unofficially.” Sarney explained to the court that both the partners and the government needed to agree, as they were the ones who provided the oil concession area in the first place. The technical information was relayed to the government and other representatives at the TCM, and the financial content would be briefed at the OCM. This was standard process for this type of work he said. Alexander Schneitre’s expertise was within geophysics and he worked closely with the seismic work.
Once a work program was approved, the work could commence. If the cost would exceed the dedicated amount by 10%, they would produce an authority for expenditure, or AFE. They would draft a daily cost update and if the calculations indicated that they would exceed the additional 10%, a further AFE would have to be sent out and approved by the partners. The partners would be informed if the operational costs were below the expected sum as well, so that they could re-allocate the excess funds.
Security issues
The first time Sarney was faced with an issue was in September 1999, when the rig was attacked. There was an incident with landmines towards the end of the same year, which resulted in Sarney shutting down operations. He was in Kuala Lumpur at the time of the rig attack, saying he was informed by phone. “I was informed because I was looking over the operation from afar […]. When the operation stops you have to ensure the well is safe and that the oil doesn’t spill.” Soon after the receiving the information, Sarney said he travelled to Sudan. Employees at the rig had been evacuated by the time he arrived in Khartoum and according to his memory, Ian Lundin was present.
The prosecutor asked Sarney if they required a security force during the seismic activity operations in 1998, showing him a fax message dated 28 September 1998, from Ian Lundin to the drilling team of which Sarney was the manager. The fax stated that Ian had discussed potential security risks to employees with Tim Sarney and Keith Hill, after someone on the drilling team had expressed concerns. Sarney read the fax displayed on one of the two screens to his left and told the court that he could not remember the fax or any security issues that could have been the basis for these concerns. Instead, he believed it had to do with having a Medevac helicopter on site. The only ones available were Russian and their safety and maintenance records were terrible. Sarney further stated that he did not recall discussing this with anyone.
A rig incident log included timestamps showing when Sarney and Ian Lundin were informed and indicated that a meeting was held in Khartoum. Sarney believed that meeting would have been to discuss what they should do with the now abandoned rig. The prosecutor questioned Sarney on a report from May 1999, written by Rapport and which stated that the guard force initially used was inefficient and that they recommended the Sudanese army for security instead. Sarney told the court that he did not remember the “hybrid guard force” but he recalled it containing six policemen from different tribes. He said that it was not strange to have the military offer to provide security. A report written by Richard Ramsey, dated 11-18 May 1999, was then displayed on the four screens. The report asserted the requirements that needed to be met in order for the company to resume operations. Sarney did not recognize more than a few names mentioned in the report.
Sarney explained to the court that he was involved in the construction of the all-weather road but could not recall specific meetings. The costs would have been approved by the partners and the government and then the construction opened for tender. The contract was given to Heglig Construction Company, and he recalled that they didn’t get very far south of Rubkhona before there was a security incident and construction was suspended. “Somebody attacked the road construction crew because they didn’t want the road built.” When asked about whether they had security concerns about the route of the road, Sarney told the court there were two things to consider. Firstly, the route was to be as short as possible and secondly, there was no geographical reason to suspend the work. They avoided villages because there was the possibility of road accidents, he said. The final document shown was the road agreement for the all-weather road. The document described the Jikany area as vulnerable to security issues because the area was not under the Sudanese government’s control. Sarney could not explain this, saying only that he thought that was swamp ground. He added that he did not demand any troops for road construction and that he would not have known to where they were deployed.
