Sun, Sep 16, 2012 - Page 5 News List

China pins hopes on Sudan oil flow

REUTERS, BEIJING

South Sudan may resume pumping oil as soon as November, China’s ambassador to Africa said, adding that Beijing was optimistic leaders in Juba will reach pricing terms with Sudan on piping crude through the country from which it recently split.

China’s special envoy to Africa Zhong Jianhua (鍾建華)has made several trips to the African nation that seceded from Sudan in July last year, holding talks with officials from Khartoum and Juba, where Chinese oil companies are heavily invested. South Sudan halted oil flows in January during its dispute with Khartoum over how much it should pay to export crude through pipelines in Sudanese territory.

Fighting along the 1,800km border in April threatened to turn into a full-scale war when the South seized the Heglig oil-producing region long held by Sudan.

Tensions have lowered and Beijing sees “several agreements” being signed this month, Zhong said.

“If the two presidents [of Sudan and South Sudan] meet sometime around the 20th of September and sign several agreements, I will not be surprised,” Zhong said.

“We would expect that they will probably still carry out negotiations for other matters such as demilitarization ... so that by the end of the year — the resumption of oil production by November — that is what we expect,” he said.

Sudan and South Sudan have held frontier talks in the Ethiopian capital Addis Ababa, facing a Sept. 22 UN Security Council deadline to reach a deal or risk sanctions.

Zhong’s outlook is more optimistic than projections by South Sudan oil officials, who have said resuming output in Upper Nile state, home to South Sudan’s key oilfields, was possible by year’s end. Turning on wells in the state of Unity would probably take longer.

The South reached a preliminary deal on transit fees with Sudan last month that could open the way to resuming oil exports, but Khartoum still wants a deal to secure the volatile shared border before crude flows resume.

China, heavily invested in the oil sector of both nations, has found itself caught between its long-time ally in Khartoum in the north and its new partner in the South, which inherited much of Sudan’s oil output after the split.

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