China urges north and south Sudan to keep oil flowing
China, a major buyer of oil from Sudan and South Sudan, urged the two governments on Tuesday to end a dispute over transit fees that led Sudan to halt the landlocked South's oil exports.
Since southern Sudan seceded from its larger and long-dominant north in July, China has sought to maintain good ties with both countries, despite the rancour between them.
But Beijing's balancing act is being tested by Sudan's Monday announcement that it had halted landlocked South Sudan's oil exports until the two sides agree on a transit fee, stepping up a row between the former civil war foes over how to untangle their once-integrated oil industries.
South Sudan seceded on July 9, taking about three-quarters of the formerly united country's roughly 500,000 barrels per day (bpd) of oil production -- the lifeblood of both economies.
Most Sudanese oil is located in South Sudan, but exports to China and elsewhere have to pass through pipelines and a seaport located in the north.
Chinese Foreign Ministry spokesman Hong Lei urged the two governments to avoid choking off oil supplies.
"We believe that maintaining the normal production of oil is important for both South Sudan and Sudan," Hong told a daily briefing.
"We hope that north and south Sudan will exercise reason and restraint, and use a flexible and pragmatic approach to resolve their problems through friendly consultation," he said.
"We are confident that the two governments will abide by their promises, ensure the stability and continuity of oil cooperation, and protect the lawful rights of Chinese businesses and the safety of their personnel."
By October, China's purchases of Sudanese crude appeared little affected, with imports in the first 10 months of this year up 5.5 percent on the year at 11.12 million tonnes, or about 5 percent of China's total crude oil imports.
Khartoum decided to stop the government of South Sudan's oil exports -- roughly 200,000 bpd -- on November 17, Ali Ahmed Osman, Sudan's acting oil minister, told reporters on Monday.
But he added that the pipeline was still running and international firms would not be affected.
Sudan had been allowing South Sudan to continue exporting crude without a final agreement in expectations the fees would be paid after a deal.
Osman said South Sudan already owed Sudan some $727 million in arrears for the period between July 9 and the end of October.
Sudan had blocked a shipment of South Sudan's oil in August, and said it was asking for a transit fee of $32 per barrel. South Sudan rejects the figure as too high.
Before South Sudan seceded, the two governments split revenues from southern oil roughly 50-50.
In August, China's visiting Foreign Minister Yang Jiechi vowed that Beijing would support both Sudan and South Sudan and help both countries develop their oil industries.
China maintained close economic and political ties with north Sudan throughout a U.S. trade embargo and also wants to reach out to the south, which decided to break away from Khartoum under a 2005 peace deal.
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