Oil-hungry China takes Sudan under its wing

David Blair – The Telegraph

Copyright – The Telegraph
Khartoum
(Filed: 23/04/2005)
A metallic maze of chimneys, pipes and vents glitters
on the horizon in the desert outside Khartoum,
dominating the landscape for miles around.
This new oil refinery is the jewel in the crown of
Sudan’s military regime. It forms the vital artery of
a thriving oil industry that poured £1 billion into
government coffers last year.
Without this windfall gain – likely to be far larger
this year – President Omar al-Bashir could not
maintain his military machine, let alone wage war
against rebels in the western region of Darfur. Nor
could he hope to withstand the international pressure
that his bloody campaign in Darfur has brought upon
him.
Moreover, the oil that started to flow as recently as
1999 has given President Bashir an indispensable
international ally.
Almost unnoticed by the outside world, China has
become the key player in Sudan’s oil industry.
Beijing has invested £8 billion in Sudanese oil
through the China National Petroleum Company (CNPC), a
state-owned monolith. The cost of Khartoum’s new
refinery alone was about £350 million.
Freshly painted billboards in Khartoum carry pictures
of smiling Chinese oil workers and the slogan: “CNPC –
Your close friend and faithful partner”. But this
faithful friend is secretive about its stake in
Africa’s largest country. China’s embassy in Khartoum
and its commercial office declined to talk about oil.
A CNPC spokesman said: “We are a shareholder in a
number of operating companies here. We conduct our
operations through them. If you want to learn more,
you must contact the mines and energy ministry.”
Yet CNPC’s annual report discloses that about half of
all its overseas oil comes from Sudan. It deployed
10,000 Chinese workers to build a 900-mile pipeline,
linking Heglig oilfield in Kordofan province with Port
Sudan on the Red Sea.
The company’s report trumpets this achievement as its
“first long-distance crude pipeline constructed and
operated abroad”.
In fact, China shamelessly curried favour with Mr
Bashir by speeding up this mammoth project so it could
be finished in June 1999 – the tenth anniversary of
the coup that brought him to power.
China is now dependent on Sudan for seven per cent of
all its oil imports. Hence Beijing has gone to great
efforts to shield Mr Bashir.
Last September, the United Nations Security Council
passed resolution 1564, threatening Sudan with oil
sanctions unless it curbed the violence in Darfur. But
China immediately rendered this meaningless by
pledging to veto any bid to impose an embargo.
Critics accuse China of being Sudan’s chief
international protector.
“It’s very clear that’s what is happening,” said
Georgette Gagnon, the deputy director of the Africa
desk at Human Rights Watch.
“China is now the largest foreign investor in Sudan so
it has an economic interest in ensuring that the
Sudanese government is not penalised too harshly. It
has been opposed to sanctions from day one.”
Beijing needs Sudan because its appetite for oil is
insatiable.
China’s economic boom means that oil consumption is
forecast to grow by at least 10 per cent every year
for the foreseeable future. If so, China’s domestic
reserves will be depleted in the next two decades.
So the quest for overseas oil is one of Beijing’s
central goals. On Thursday China signed a “strategic
partnership” with Nigeria, a major oil exporter, and
has oil interests in at least three other African
countries.
In its scramble for Africa, China portrays itself as a
more benign partner than the colonial powers and the
modern-day multinational companies.
President Hu Jintao told an Asia-Africa summit in
Jakarta yesterday: “In pursuit of world peace and
common development, China will always stand by, and
work through thick and thin, with developing
countries.” America has already snapped-up the world’s
largest reserves. Saudi Arabia and Iraq – with 370
billion barrels between them, 45 per cent of the
world’s total – are effectively closed to China.
Sudan, by contrast, is a no-go area for western oil
companies. American investment was officially banned
in 1997 and European multinationals steer clear of the
avalanche of protest that would accompany any dealings
with Mr al-Bashir’s regime. China, however, has no
such scruples.
So far, Sudan has only 563 million barrels of proven
reserves, but the energy ministry estimates that at
least five billion barrels lie beneath its deserts.
Sudan’s few independent voices say this has brought
disastrous consequences. “The crisis in Sudan is being
fuelled by the issue of oil,” said William Ezekiel,
editor of the Khartoum Monitor. “The government is
ready to ally with Satan if it can protect its own
interests.”


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