Oil Protection Paramount
South Sudan to protect foreign investment
With oil accounting for almost 98 percent of South Sudan’s exports, the world’s youngest nation needs to protect its oilfields during times of conflict to safeguard the economy.
The first African country to receive sizeable Chinese investment in the oil industry when China National Petroleum Corp. (CNPC) entered the sector in Africa was Sudan in 1996. In 2010, CNPC opened an office in Juba City in the south and the next year, when South Sudan was born, CNPC entered the oil industry in the new country as well. “Today, China is South Sudan’s major trade partner and CNPC is engaged in more than 40 percent of oil operations in the country,” said Dr. Michael Milli Hussein, South Sudan’s Ambassador to China.
CNPC holds more than 40 percent stake in Petrodar, South Sudan’s largest oil producer and pipeline operator. CNPC also has 40 percent share in the Greater Nile Petroleum Operating Co. and a whopping 95 percent in CNPCIS, CNPC’S international Sudan branch. However, Chinese oil investors have been affected not only by dipping oil prices globally, but the unrest in South Sudan as well. Though almost 78 percent of the oilfields are located in South Sudan, leaving Sudan nearly bereft after the bifurcation, production has come to a halt several times due to disputes between the two neighbors and internal violence.
Conceding that there have been issues affecting the golden goose industry, Hussein attributed it to problems due to the disputed border between South Sudan and Sudan that is yet to be fully demarcated.
“Sometimes there are cross-border disagreements that affect [the oil] business,” he said. “But it is in the best interest of South Sudan to keep the oilfields safe. All sides depend on oil revenue and realize the oilfields should not be disturbed.” Peace talks initiative In January 2015, China gave an impetus to peace talks between the South Sudanese Government of President Salva Kiir and the opposition led by his former deputy Riek Machar by sending Foreign Minister Wang Yi to initiate dialogue in Khartoum. “It was decided that there should be an additional body besides the Inter-governmental Authority for Development (IGAD) [that led the peace mediations],” Hussein said. “So the IGAD Plus was formed comprising the troika (the United States, UK and Norway), the EU, and development partners such as China. China and the other big powers’ involvement gave an impetus to the talks.”
The South Sudan envoy also lauded the role of the 700 Chinese peacekeepers from the United Nations who have been deployed in his country since last year. There have been allegations that the contingent was sent to guard Chinese interests in the country. Hussein said the peacekeepers were engaged solely in UN peacekeeping operations and had no other role.
The envoy, a former health minister of South Sudan and the second South Sudanese ambassador to China, also expressed satisfaction with the Forum on China-africa Cooperation Johannesburg Summit in December 2015 attended by African heads of state and Chinese President Xi Jinping. “President Xi outlined 10 areas of cooperation and pledged $60 billion to be spent on projects agreed upon by both sides. That marks a stronger relationship based on mutual cooperation,” he said. “Most African countries are very happy.”
In 2012, President Kiir visited China. This year, Hussein anticipates more high-level visits. “We are in the process of forming a transitional government,” he said. “It’s important that a high-level government team visits China [for stronger diplomatic
For any young nation, the start is very difficult. We have to start with the development of institutions.
Michael Milli Hussein, South Sudan’s Ambassador to China
ties] as well as the UK, Russia and other big powers to explain this positive development.”
Nation-building blocks
Besides the oil industry, there are over 100 Chinese companies in South Sudan working in mining, agriculture, construction and running healthcare institutions. South Sudan, Hussein said, is looking for cooperation in other areas: “For any young nation, the start is very difficult. We have to start with the development of institutions.”
As part of the institutional development assistance, the Chinese Government is providing scholarships to South Sudanese. In 2015, nearly 40 college/ university teachers enrolled for higher education in Chinese institutions. Additionally, about 60 students are studying in China, mostly petroleum engineering. “The goal is to train South Sudan nationals to take over the national petroleum industry in five to 10 years,” Hussein said. “Officers from the Ministry of Foreign Affairs and Ministry of Culture, Youth and Sports have received training.”
Talks are also going on between the two sides for training opportunities for South Sudanese youths in kungfu and acrobatics in China.
South Sudan has been reaching out to China soon after its inception. Hussein said in 2013 one of their governors visited Taizhou in Jiangsu Province in east China to discuss more people-to-people cooperation and establishing twin-city relations between the Chinese city and South Sudanese capital Juba.
The African nation is also interested in harnessing solar energy and some of the talks centered on exchange of experience in the sector.