Sudan Appeals for Chinese Help in Settling Oil Dispute

Posted February 28th, 2012 at 5:25 am (UTC-5)
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Sudan has asked China for help in resolving a long-running dispute about oil revenues with newly independent South Sudan, while the south says it is looking for alternative sources of income.

After meetings in Beijing Tuesday, Sudanese Foreign Minister Ali Ahmed Karti said Sudan will also consult with other partners, as it tries to end the impasse.

“We are inviting also the companies, CNPC and Petronas to give ideas also to help the mediation, and we are also inviting China and Malaysia and, for sure, the Indians will be accepted also to give any ideas that will help the mediation to get a solution.”

South Sudan halted oil production in January, after accusing Sudan of stealing more than $800 million of oil transported through northern pipelines.

South Sudan Deputy Finance Minister Marial Awou Yol said Monday the country has enough foreign exchange reserves to last one year, but that cutting the oil flow has forced the government to cut spending and seek new forms of revenue.

“There is no more oil now flowing to the outside world through the Republic of Sudan. Because they have imposed very unrealistic charges on what they call transit fee to take our oil through the pipeline to Port Sudan for export.”

Khartoum has said it seized the oil because South Sudan had not paid the required fees to use its pipelines and export facility.

More than 70 percent of Sudanese oil now belongs to South Sudan, but the new nation is landlocked and must rely on oil pipelines that run north to export it.

Both countries rely heavily on oil revenues, and their escalating dispute has raised fears they are on the brink of war.

Last week, South Sudan expelled the Chinese leader of Petrodar, a consortium that includes state-run China National Petroleum Corporation (CNPC) and Malaysia’s national oil company, Petronas. South Sudan accused the leader, Liu Yingcai, of cooperating with the north to steal millions of barrels of oil.

China is the largest purchaser of Sudanese oil.