Beijing caught in oil-field war

Editor’s Note: The following report is excerpted from Joseph Farah’s G2 Bulletin, the premium online newsletter published by the founder of WND. Subscriptions are $99 a year or, for monthly trials, just $9.95 per month for credit card users, and provide instant access for the complete reports.

WASHINGTON – There’s violence brewing between Sudan and South Sudan, which recently declared its independence amid a civil war. And China has a lot of money invested there, according to a report in Joseph Farah’s G2 Bulletin.

Beijing’s involvement in Sudan originally was due to the control it had over oil fields, which mostly are located in what now is South Sudan.

And already, China is laying groundwork, as it has in other African and Latin American countries where it wants to extract natural resources, to invest some $8 billion in loans for infrastructure development in South Sudan.

However, Beijing is finding itself in the middle of what could turn into another war between Sudan and South Sudan if ongoing negotiations fail.

Sudan already has launched aircraft and fired artillery into South Sudan in an effort to regain a portion of a disputed border area where there is an oil field.

While the creation of South Sudan was done by agreement with the north, the fact that South Sudan controls some 75 percent of the oil fields has become unsettling for Sudan.

China has its eye on the oil in South Sudan, but it also needs Sudan, because the oil would need to run through a pipeline to Port Sudan on the Red Sea for export. Construction now has ground to a halt, because South Sudan wants China to finance a pipeline that would go through Kenya to a port on the Indian Ocean.

While it is attempting to remain neutral in the dispute between the two countries, China is going to find it increasingly difficult to do so due to its heavy investment in South Sudan and the resources it requires from the fledgling nation.

Some Chinese workers involved in building a $63 million road financed by China’s Export-Import Bank recently were kidnapped in Sudan’s Kordofan region. Then South Sudan decided to halt all of its oil production after accusing Sudan of stealing some $815 million in crude oil.

South Sudan was producing some 350,000 barrels a day. Some 260,000 barrels of that production was going to China.

The president of the Chinese oil consortium in Juba, South Sudan, was expelled out of anger that the Chinese were not sufficiently backing South Sudan.

Meanwhile, South Sudan is attempting to lessen tensions by withdrawing its police forces from parts of the contested border region of Abyei at the request of the United Nations and the African Union.

The negotiations still are under way, with their outcome having an impact on China’s ability to acquire the oil and on the large infrastructure investment it already has made.

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