China, Oil, and Southern Sudan

Courtesy of Upstream Online, an interesting report on China’s concerns over what might happen to its Sudanese oil assets if Southern Sudan secedes.  As the article notes:

“…Oil-rich Southern Sudan, which gained semi-autonomy in a 2005 peace deal that ended a 21-year civil war in which 2 million people died, is to vote in a January referendum on secession from the rest of Sudan to form a new country.

“A lot of wild rumours have been getting to them, that if the south separates, there will be insecurity, and if there is insecurity, their assets worth billions of dollars in the form of pipelines and so on will have been a waste,” Anne Itto, Southern Sudan’s minister of agriculture, told reporters today in the semi-autonomous capital, Juba, upon returning from China.

“I told China, the Chinese people, that if they want to protect their assets, the only way is to develop a very strong relationship with the government of Southern Sudan, respect the outcome of the referendum, and then we will be doing business,” said Itto, who is also deputy secretary-general of the ruling Sudan People’s Liberation Movement, or SPLM.

Sudan is sub-Saharan Africa’s third-biggest oil producer, with output of 490,000 barrels per day, according to the BP Statistical Review of World Energy.

Most of the oil is pumped in the south, and China is the main destination for exported Sudan crude.

China is interested in expanding oil exploration to more blocks, Itto said. A senior delegation from the Chinese Communist Party is expected as early as October to try to “bridge the gap,” she said in a Reuters report.

“Whether anybody likes it or not, China is providing leadership in the development of developing countries,” she said.

“They are stepping up. They are funding, particularly in the area of agriculture and exploration of natural resources.”

China National Petroleum Corporation is the operating partner in the Greater Nile Petroleum Operating Company, of which it owns 40%.

The majority of the GNPOC’s concession falls in Southern Sudan territory, though the oil contracts were signed with the Khartoum government in the north during the war.”

This entry was posted on Sunday, August 22nd, 2010 at 12:49 pm and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

Comments are closed.

Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.