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China and Sudan’s oil

· Peking mediates between Khartoum and Juba ·

Last week’s visit by Chinese Foreign Minister, Yang Jiechi, to Sudan and South Sudan, confirms the Peking government’s decision to maintain an important role in the two countries, where it has significant interests, especially in the oil sector. Official communication, including the declaration by Yang Jiechi that China is prepared to mediate between Khartoum and Juba on open questions as well as information from anonymous diplomatic sources show that the Chinese mission was motivated by uncertainty and a lack of agreement on the question of oil. The two countries are still divided on the management of oil resources and recent episodes suggest that tensions are high. During the visit of the Chinese Foreign Minister, the authorities in the Port of Sudan blocked the release of oil from South Sudan because of unpaid customs tax prompting a phone call from the South Sudan President, Salva Kiir Mayardit to Omar Hassan el Bashir, the President of Sudan to resolve the situation. A similar episode occurred immediately following the declaration of South Sudan’s independence, on July 9th, when the first export of South Sudan oil heading to China was initially blocked. The division of oil utilities is one of the unresolved issues between Khartoum and Juba. 73% of reserves are located in South Sudan, with the rest in Sudan or contested areas, such as Abyei. During negotiations from January through July, when the new state was formed, positions remained distant. According to Sudan’s government, the division of oil resources should remain as planned. The Juba authorities, however, want to change those original plans in order to control drilling and only pay for the use of pipelines.

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Sept. 20, 2018

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