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China Invests Heavily In Sudan's Oil Industry

"Oil from Sudan makes up one-tenth of all of China's imported oil," said Zhu Weilie, director of Middle East and North African Studies at Shanghai International Studies University, who has links with the Foreign Affairs Ministry. "If we lose this source, how can we find another market to replace it? China has to balance its interests."

Sudan is not a member of the Organization of Petroleum Exporting Countries, but it was granted observer status in August 2001, a sign it is being recognized as a significant oil producer. Its proven reserves are currently 563 million barrels, double what they were three years ago.

Stephen Mayang leans against the house he built in Leal, Sudan, after government troops and Arab militias forced him from his previous home. (Peter S. Goodman -- The Washington Post)

In an interview in Sudan's capital, Khartoum, Energy and Mining Minister Awad Ahmed Jaz praised his Chinese partners for sticking to trade issues.

"The Chinese are very nice," he said. "They don't have anything to do with any politics or problems. Things move smoothly, successfully. They are very hard workers looking for business, not politics."

Human rights advocates and opponents of the Sudanese government portray China's role in different terms: Just as colonial powers once supplied African chieftains the military means to maintain control as they extracted natural resources, China is propping up a rogue regime to get what it needs.

"The Chinese calculation is to consolidate and expand while Sudan is still a pariah state," said John Ryle, chairman of the Rift Valley Institute, a Nairobi-based research group that focuses on East Africa.

One of the poorest countries in the world, Sudan has long aimed to extract oil riches but lacked the necessary capital. It needed the help of deep-pocketed outsiders. In the 1960s and 1970s, Chevron Corp. took the lead. But as the civil war flared in the south in the 1980s, Chevron abandoned its concessions. During the early 1990s, the Canadian firm Arakis Energy Corp. took up the task, later selling out to a larger Canadian company, Talisman Energy Inc.

China National Petroleum Corp., still owned by the Communist Party government, bought into the Sudan consortium in 1996. It joined with Sudan's Energy Ministry to build the country's largest refinery, then last year invested in a $300 million expansion that nearly doubled production, according to a report in the Shenzhen Business Post.

The consortium's Heglig and Unity oil fields now produce 350,000 barrels per day, according to the U.S. Energy Department. Separately, CNPC owns most of a field in southern Darfur, which began trial production this year, and 41 percent of a field in the Melut Basin, which is expected to produce as much as 300,000 barrels per day by the end of 2006. Another Chinese firm, Sinopec Corp., is erecting a pipeline from that complex to Port Sudan on the Red Sea, where China's Petroleum Engineering Construction Group is building a tanker terminal.

Sudan's bloody north-south conflict began long before China arrived, but oil has dramatically increased the stakes as well as the government's ability to pursue the battle. The war is a struggle over the resources of the south, pitting the mostly Muslim, Arab elite that runs the government in Khartoum against the largely Christian and animist African tribes who live in the lower half of the country.

For years, the government lacked the arms to vanquish the Sudan People's Liberation Army, the rebel group that controls much of the south. With the dawn of oil production in 1999, Sudan's government began collecting $500 million a year in revenue. About 80 percent went to buy weapons, said Lam Akol, who was Sudan's transportation minister from 1998 to 2002 and is now a rebel commander. Over the same period, Sudan's military budget has doubled, according to the International Monetary Fund. A study by PFC Strategic Studies concluded that the Sudan government could collect as much as $30 billion in total oil revenue by 2012, with the potential for much more if exploration succeeds.

As the oil began to flow, Sudan relied on Chinese assistance to set up three weapons factories near Khartoum, Ryle said. Human rights groups say oil receipts have helped pay for a government-led scorched-earth campaign to remove mostly ethnic Nuer and Dinka tribes from around the oil installations. The goal is to deprive the rebels of a base of support in their bid to attack the industry and undermine the government's oil revenue.

A report by the U.S.-funded Civilian Protection Monitoring Team, which investigates attacks in southern Sudan, asserted that government troops have "sought to clear the way for oil exploration and to create a cordon sanitaire around the oil fields."

"This government has always waged war against civilians," said Jemera Rone, Sudan researcher for Human Rights Watch in Washington. Aided by an influx of newly purchased helicopters, a government attack in Ruweng county in October 2001 displaced 80,000 people, according to a Human Rights Watch report. The next year, government troops again used helicopters, killing 24 people during an attack on an emergency food distribution center.

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