Sudan – South Sudan: Oil and the Dragon


Human Wrongs Watch

By James Green* – Think Africa Press  Since the creation of the world’s newest state in July of last year, many have followed South Sudan’s prospects for a peaceful future with trepidation.

Chinese engineers join a UN peacekeeping force in Darfur in 2008 | Think Africa Press

Despite the near unanimous result of the referendum to secede from Sudan, and the North’s apparent acquiescence at the South’s departure, the lack of agreement over how to divide the country’s vast oil wealth seemed an inevitable flashpoint.

However, as the issue drove relations to their nadir in November and talks collapsed, a seemingly unusual candidate for mediation appeared as China intervened to keep both the negotiations and the oil flowing.

After years of criticism in the West for its apparent political inactivity over the crisis in Darfur – Sudan’s conflict-ridden Western region – how significant a change is this for China’s African foreign policy? And how well is China positioned to make a difference to the on-going peace process?.

Fists of Fury

The 2005 Comprehensive Peace Agreement saw an end to decades of civil war in Sudan between the principally Muslim North and the mainly Christian South. It also led to a largely peaceful secession process in a region marred by violence, with several contentious issues, such as drawing the border between the two nations, finding tentative agreement.

However, the situation has remained volatile: fighting has continued in South Kordofan on the North side of the border, where the ethnic Nuba group are fighting with Khartoum’s army, while a refugee camp in the South was bombed in November.

The Oil Factor

It was in this context that tensions over oil, the region’s most valuable resource, came to a head. Before the country’s division, Sudan produced around 500,000 barrels of crude oil per day.

Land-locked South Sudan now possesses about 75% of these oil reserves, while the North has the infrastructure required to distribute it to the international market in the form of pipelines and ports.

Both governments are heavily dependent on oil: an estimated 98% of South Sudan’s government revenues depend on it. Since separation, the North’s foreign reserves have been dwindling, and both sides have been employing hard-line negotiating tactics.

The negotiations mediated by the African Union saw the North suggest a fee of $36 per barrel and demand $727 million in arrears for the pipelines’ use since independence, while South Sudan’s government countered by offering less than a dollar per barrel.

On November 8, President Salva Kiir of South Sudan ordered the expulsion of Sudapet, the North’s national oil company; the North retaliated by announcing the suspension of oil exports from the South.

Enter the Dragon

It was at this juncture that China intervened. China is uniquely positioned to do so: the China National Petroleum Corporation (CNPC) is the single biggest investor in Sudan through its 40% stake in the Khartoum-based Greater Nile Petroleum.

The Investment

Since entering Sudan in 1996, China has developed the country’s oil infrastructure, last year purchased 70% of its crude oil exports, and also helped finance extensive developments in the region such as the $2 billion hydroelectric Merowe dam built in the North.

Moreover, despite China’s long history of supporting Khartoum, the new government in the South has recognised the necessity of Chinese investment in a nation that has desperate need of infrastructure.

Pagan Amum, the secretary-general of South Sudan’s ruling Sudan People’s Liberation Movement (SPLM), recently referred to China’s role in earlier conflicts as “a troubled history”, and promised “we will not allow ourselves to be hostages of the past”, but also reiterated his commitment “to sort things out, to heal”.

It was under these circumstances that China began its intervention by dispatching its envoy for African affairs, Liu Guijin, to the region. Liu managed to break the deadlock, warning that “the repercussions would be very serious” for all involved if the situation were not resolved.

Western Companies Abandoning Sudan

For China’s part, the intervention amounted to protecting both its extensive investments and the energy security it has accrued since Western companies abandoned Sudan in 1996. The evolving crisis in Darfur further ensured a lack of competition.

Indeed, the CNPC’s willingness to continue operations in Darfur amid concurrent allegations that the Chinese government was supplying weapons to the Sudanese military led to public outrage in the West and an embarrassing ‘Genocide Olympics’ campaign in 2008.

Many commentators in the West have highlighted the irony that China should now be responsible for preventing a return to war after allegedly helping to perpetuate it previously with its ‘business-only’ approach to foreign affairs.

But how far does this represent a change to Chinese policy?

The Way of the Dragon

As recently as 2009, President Omar al-Bashir of Sudan boasted of how “the success of the Sudanese experiment in dealing with China without political conditions or pressures encouraged other African countries to look toward China.”

However, China’s approach has become gradually more nuanced over the last five years. Although Beijing has been unwilling to support military intervention or sanctions in Darfur, it has consistently engaged in diplomatic pressure on its ally to reconcile its various goals.

China supported the UN resolutions for peacekeeping missions in Darfur, and has sent several hundred troops to the region.

Moreover, it did not use its veto on the UN Security Council to halt the referral of the situation in Darfur to the International Criminal Court, leading to President al-Bashir’s indictment. Exerting its influence in pushing both parties back to the table in current negotiations is in keeping with this.

Shifting Foreign Policy

Indeed, this is consistent with how China’s broader foreign policy has shifted over the last five years. Although it has lent great support to the North Korean regime, China condemned its nuclear test in 2006, and took an active role in drafting the UN Security Council Resolution 1718, which imposed sanctions.

This was followed by an agreement to stricter sanctions after a second nuclear test in 2009. China has also adapted its stance on Burma and voted in favour of a number of Security Council resolutions imposing sanctions on Iran in response to its continued enrichment of uranium.

While China may operate under a different traditions of foreign policy to the West, that does not mean that it operates without political conditions.

Despite much promise, however, there is a limit to what China can achieve in Sudan and north-south relations remain contentious.

In his New Year’s message, for example, President Kiir continued to accuse the North of stealing South Sudan’s oil in what amounted to, “looting in broad daylight”. However, with all that China has invested in the region, one can expect Beijing to continue to do all it can to effect a resolution on this volatile issue.

*James Green studied History at Bristol and Oxford. He is currently working as a freelance journalist. This article was first published by Think Africa Press. Go to Original.

Also Read

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It’s War in South Sudan

Does Anyone Know Anything About A New Country Called South Sudan?

South Sudan’s Population: Rural, Poor And Uneducated

South Sudan: Yet Another Kitchen-Garden?

A ‘Storm of Hunger’ Gathering on South Sudan

South Sudan Running Out of Food

Nile Countries’ Population to Increase by 68-80% … With Not One Single Drop of Water More

2012 Human Wrongs Watch

3 Responses to “Sudan – South Sudan: Oil and the Dragon”

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