THE government of South Sudan is already flexing it's muscles on the international stage by shutting off the oil from their fields to punish the government of Sudan for fraud and theft. It is too bad the Arab League and the Persian Gulf oil producers are too greedy to take the same action against the prc for their support of Syria's assad. South Sudan's oil embargo in defense of their political and economic independence has the prc over a barrel, so to speak (something the Gulf oil producers could do as well), and we can only hope the South Sudanese government and people come out on top with more development revenue from their oil from both the prc and Sudan.
JUBA, South Sudan — On the day South Sudan became independent last
year, China opened an embassy here, eager to protect its oil interests.
It quickly dispatched its foreign minister and began discussing a huge
aid package for this destitute land.
Just a few months later, Beijing finds itself trapped in a bitter
wrangle between South Sudan and its former rulers in Sudan, with both
countries pressing Beijing to take their side.
The dispute has cut
off a significant source of oil to fuel China’s booming economy and
imperiled billions of dollars in Chinese investments. It has also
threatened Beijing’s diplomatic and economic relations
with both the countries and strained the boundaries of a long-standing Chinese policy of noninterference in the internal affairs of other nations.
“This
new reality has left China uncomfortably stuck in the middle of a tug
of war,” said Zach Vertin, a Sudan analyst with the International Crisis
Group, a nonprofit think tank. “Both sides have attempted to leverage
the Chinese oil interest and draw them in line with their own
interests.”
The saga playing out in one of the world’s poorest
regions highlights the troubles an increasingly prosperous China faces
as it tries to adjust to tumultuous change: from Sudan to Libya, Syria
and Burma, Beijing has resisted what it portrays as Western-style
meddling. But by staying on the sidelines, China has jeopardized its
interests and image as a friend of the developing world. Many Arab
nations, for example, were furious when China joined Russia in blocking
United Nations action on Syria.
At the center of the struggle
between the two Sudans is oil, which until last summer was controlled by
Khartoum but which now lies mostly within the borders of the world’s
newest state, the Republic of South Sudan. China is the biggest player
in the oil industry on both sides of the frontier: It holds big stakes
in the main oil fields in the south and in pipelines and other
infrastructure in the north.
After years of providing diplomatic
cover and weapons to a regime in Khartoum ostracized by the West, China
must face up to a simple fact, said Pagan Amum, the secretary general of
South Sudan’s ruling party: “The master has changed. It was Khartoum.
Now it is Juba.”
China’s efforts to shift gears in Sudan began in
2005, with the signing of a peace deal between Khartoum and southern
rebels. The agreement ended what was Africa’s longest civil war and
paved the way for South Sudan’s independence in July. But officials
today say that the Chinese have not done enough to erase suspicions
rooted in Beijing’s long support for Sudan’s president, Omar Hassan
al-Bashir, an indicted war-crimes suspect who used Chinese-supplied arms
in trying to prevent the south from seceding.
South Sudan, which
depends on oil for 98 percent of its revenue, insists that it wants to
remain partners with China. But South Sudanese officials warn that if
Beijing does not align its interests with their country, they will seek
out U.S. and Western oil companies.
In testimony before the Senate
Foreign Relations Committee this month after a trip to South Sudan,
Hollywood star George Clooney, a longtime critic of Bashir’s regime,
noted that China’s massive investment in Sudan makes Beijing crucial to
settling continuing violence in the region. China, he said, has invested
about $20 billion, but “right now they are getting nothing from this”
because of feuding between Khartoum and Juba. Clooney and several
members of Congress were later arrested during a protest at the Sudanese
Embassy in Washington.
Khartoum, which depends heavily on
Chinese investment, trade and aid, is determined to keep Beijing on its
side. The government dispatched a senior envoy to Beijing last month and
has exerted influence over Chinese-led oil consortiums, which pump most
of their oil in the south but still need the north to get it to China.
The
south has refused to pay hundreds of millions of dollars in royalties
for using Sudan’s pipelines, saying that the fees were exorbitant. Sudan
responded by seizing oil tankers carrying South Sudanese crude and
imposed a blockade on the export of the oil. Last month, South Sudan
shut down its oil production, roughly 350,000 barrels a day, after
accusing Sudan of stealing $815 million worth of its oil.
South
Sudan says it will pay less than $1 a barrel in fees to transport oil
through the north’s pipelines. Khartoum says it wants $36 a barrel and
$1 billion in back payments. The two sides are even fighting in a London
court, as South Sudan seeks to recover money from the sale of the
seized crude.
South Sudan said recently that it intends to build a
pipeline that would head south to Kenya. It is not clear who would fund
such a massive project, but, if built, the pipeline would sharply
reduce Juba’s dependence on the north — and the value of China’s huge
investment in existing pipelines to Sudan’s Chinese-built oil export
terminal on the Red Sea.
An old alliance under threat
It was inevitable that China would get tangled in the dispute.
The state-owned China National Petroleum Corp., or CNPC, has a big stake
in most of the biggest oil concessions. The oil from both Sudans
represents at least 5 percent of China’s global crude imports.
This
is much less than what China imports from Angola but is still
important, especially as it is produced mainly by Chinese companies that
are controlled by the state and, thus, in Beijing’s view, are more
reliable. Angola’s oil, by contrast, is largely pumped by Western
companies.
China also has great leverage over Sudan. Beijing
provides massive loans to the north; oil and trade bring in billions
more in foreign currency, vital to run Sudan’s economy and to buy
weapons.
CNPC, whose boss in Beijing is appointed by the ruling
Communist Party, declined to comment for this report. The company
requested and received written questions but did not respond. In public
comments, Chinese officials have sought to maintain neutrality, saying
that both Sudans “can only achieve common development through peaceful
co-existence.”
In Juba, officials stressed that China should make
greater efforts to persuade Khartoum to accept South Sudan’s position.
“We are not asking China to help us. We are asking China to help itself
with its friend,” Amum said. He made clear that Juba would no longer
tolerate China’s alliance with Khartoum.
“They are used to looking north,” he said. “They are now being told to turn around, southward.”
There
are signs that China’s previously rock-solid support for Khartoum might
be softening. In a recent interview with Qatar’s al-Raya newspaper,
Bashir complained that Beijing had cancelled a loan to his government
for a big agricultural development project. China pulled out, the
Sudanese president said, because Khartoum was due to repay the money
with oil shipments, which had been disrupted by the south’s
independence.
Even so, it is unlikely, analysts said, that China
would jilt Khartoum for Juba — that would probably alarm other
repressive and corrupt regimes, such as those in Angola and Equatorial
Guinea, where China has forged highly profitable oil relationships.
“The
Chinese are not going to throw away old friends,” Vertin said. “They
won’t abandon Sudan. That would be a bad precedent for them.”
Sudan
also has some powerful and so far loyal friends in Beijing, though how
long this lasts may depend as much on the labyrinthine internal politics
of the Communist Party as events in Africa. One of Khartoum’s biggest
backers in Beijing for years has been Zhou Yongkang, a member of the
party’s Politburo Standing Committee responsible for security. In recent
days, however, rumors — all unconfirmed — have swirled in Beijing that
Zhou is in deep political trouble after the purge last week of a senior
party official with whom he is thought to have been allied.
Zhou
used to be the head of CNPC, the state oil company, and led its push
into Sudan’s oil sector in the 1990s after American and other Western
companies pulled out. He has visited Khartoum repeatedly.
China’s predicament
Amid mounting anger in Juba over China’s continuing coziness with
Khartoum, South Sudan on Feb. 20 expelled Liu Yingcai, the head of
Petrodar, a consortium that is majority owned by CNPC.
In a
letter, the Juba government accused Liu of colluding with Khartoum to
steal South Sudan’s oil and of not fully cooperating with orders to shut
down oil production. Petrodar, in a statement, denied the allegations.
The consortium said it had ordered staff members “not to comply with the
forced lifting” of oil, which it said was done by members of Sudan’s
national security forces.
Now, South Sudan has launched an
investigation of Petrodar to determine the extent of its role in the oil
theft. Juba is also probing the actions of the Greater Nile Petroleum
Operating Co., an oil consortium that is 40 percent owned by China and
that also may have helped Khartoum steal oil. If the consortiums are
found sufficiently guilty, Amum said, their contracts could be
terminated.
“It will be an opportunity for others, with possibly
even better technology, to come in,” Amum said. “If the Chinese are not
with us, we will have another very good story, too. With the Chinese or
with others, we will prosper.”
As tensions between the two Sudans
grow, China’s predicament becomes more precarious. Last month, Sudan
allegedly bombed an oil field at El Nar in South Sudan, nine miles from
the jagged, contested border between the two countries, sending Chinese
and other foreign workers maintaining the oil wells scrambling for their
lives.
“They bombed this place because of the oil,” said Miakol
Lual, a local tribal chief. The attack destroyed portions of the oil
infrastructure.
“It’s a message to all foreigners: ‘You deal with
us, not the other side,’ ” said a foreign supervisor who spoke on the
condition of anonymity because he was not allowed to talk to the media.
Khartoum has denied attacking the field.
In Juba, Chinese expatriates are growing anxious. In January, rebels linked to South Sudan
kidnapped 29 Chinese workers
in Sudan, releasing them last month. The Chinese Embassy has ordered
all its nationals to stay in at night and not discuss anything sensitive
with locals.
“Everyone is worried about the situation,” said a
Chinese telecommunications worker who spoke on the condition of
anonymity because he feared he would get fired. “If things get worse, we
have made preparations to move out of here.”
http://www.washingtonpost.com/world/africa/china-in-a-tug-of-war-between-two-sudans/2012/03/07/gIQAQUUrWS_print.html
We’re also behind schedule. To prevent another outburst of violence, the United States must convince the regime in Khartoum, ruled by wanted war criminal Omar al-Bashir, to stop stalling and start seriously preparing for the vote. Our government must demand that all parties in Sudan allow unimpeded access for peace keepers, humanitarian aid organizations, and robust human rights monitoring throughout the country. The United States must also demand that other nations – like China and Russia – respect the outcome of the referendum.