Black Gold For Blood Money In Sudan

For 19 years now, war in Sudan has been a way of life, and for many, a way of death. From the northern capital of Khartoum, President Omar el-Bashir and his Islamic fundamentalist government wage civil war, against the rebel Sudanese People's Liberation Army.

It's Muslim against non-Muslim, north against south, Arab Africa against black Africa, and as CBS News Correspondent Dan Rather reports, there are no winners.

"Two million people have died. There is a tremendous amount of human misery in Sudan," said U.S. Special Envoy to Sudan, John Danforth.

As if the chronic drought and famine weren't enough, a new and dangerous element has bubbled up from Sudan's killing fields: oil. Foreign companies like Canada's Talisman Energy have swooped in to tap the newly discovered reserves, paying more than a million dollars a day in royalties. Sudan's government, in turn, has used the money to buy arms, and fund brutal operations against rebel soldiers - and civilians - in the south.

John Garang has led the Sudanese rebels since 1983, and is not without blood on his hands. But he says the Islamic government has committed atrocities and driven thousands from their homes - all to make way for oil exploration.

"Churches are being burned. Hospitals are being bombed. This is going on," said Garang. "Oil has been discovered in the country. It is being exploited by the Taliban regime in Khartoum, and it is fueling the war."

Danforth, a former senator, was appointed U.S. Special Envoy to Sudan last fall and he has a controversial approach. Rather than calling on the oil companies to pull out of Sudan, he's proposed that the warring sides share oil profits - seeing it as an inducement toward peace.

"It's possible to view oil as not simply the problem but as a possible way out of the problem," said Danforth, who believes that oil revenues should be available to both sides for the development of their parts of the country. "That could be a very positive incentive, it could be something that people want to accomplish."

For its part, Talisman Energy of Canada insists it's improved living conditions, building wells and health clinics.

"Yes peace is needed, yes it's been a long tragedy, but Talisman withdrawing isn't going to help anything," said Talisman Energy Inc. president Jim Buckee.

But several human rights groups disagree, and Talisman has been sued in U.S. federal court on behalf of Sudan's non-Muslims, who say they've been the victims of war - and oil.

"When you are an oil driller, and you have to drill through people's blood to get to that oil, then you are responsible for it," said attorney Stephen Whinston.

United States law forbids American companies from doing business with Sudan. But American individuals - and institutions - can, and do, invest in Sudanese oil. That's because Canada's Talisman Energy is openly traded on the New York Stock Exchange, but according to some reports, Talisman is trying to sell off its stake in Sudan due to growing criticism. A company spokesman would not confirm that, but told CBS News Friday, "All of our assets are for sale at the right price."