Wednesday, February 22, 2012

South Sudan Expels Head of Chinese-Malaysian Oil Firm

South Sudan expels head of Chinese-Malaysian oil firm

Tue, Feb 21 2012

* South Sudan escalates row with Chinese oil firms

* Petrodar head expelled for lack of cooperation - official

* Chinese firms investigated for helping Sudan seize oil

* China is the biggest buyer of South Sudan's oil

* Thursday's talks with Sudan delayed till March 6- official (Adds more quotes, details, background)

By Hereward Holland

PALOUGE OIL FIELD, South Sudan, Feb 21 (Reuters) - South Sudan has expelled the head of Chinese-Malaysian oil consortium Petrodar, the main oil firm operating in the new African nation, a top southern official said on Tuesday, escalating a row between Juba and Chinese oil firms.

South Sudan has repeatedly attacked Chinese oil firms and launched an investigation into whether they helped Khartoum seize southern oil being exported from the landlocked country through Sudan. Juba has shut down its oil output of 350,000 barrels per day to end the seizures, which were sparked off by a dispute over transit fees.

"The (oil) minister has just expelled the president of Petrodar," said Pagan Amum, South Sudan's top negotiator for talks with Sudan over oil payments.

"I think one of the reasons is lack of cooperation by the President of Petrodar (with the government) and we have dismissed him and expelled him and we are asking the partners to appoint a new president," he told Reuters during a visit to the Palouge oil field.

Amum said relations with China were good but there were difficulties with some oil companies.

Petrodar, which pumped 230,000 bpd and exported the southern oil through a Sudan pipeline until the shutdown, categorically rejected the accusations on Sunday and said it had followed only southern instructions.

South Sudan's attack on Chinese interests is puzzling Western diplomats because China is the biggest buyer of its oil.

Petrodar is a consortium of mainly Chinese state firms Sinopec, Chinese National Petroleum Corp and Malaysia's Petronas. It runs oil fields in South Sudan's Upper Nile state, to which Palouge belongs, and also an export pipeline through Sudan.

Many South Sudanese feel bitter about China because of its support for Khartoum during decades of civil war between the Muslim north and mainly Christian South that killed two million people. The conflict ended only in 2005 with a peace agreement that paved the way for southern independence.


South Sudan took three-quarters of Sudan's oil production when it became independent in July but needs to export crude through a northern pipeline and a Red Sea port.

Both states have failed to agree on transit fees Juba needs to pay, prompting Khartoum last month to seize at least three southern oil shipments at the Red Sea terminal.

Amum also said oil talks with Sudan scheduled for Thursday would be delayed until March 6.

"On the request of the government of Sudan the talks have been postponed to March 6," he said.

A spokesman for the Sudanese foreign ministry said he could not confirm the date.

The African Union has been trying to resolve the oil conflict but positions are wide apart. The South wants to pay around $1 a barrel as fee, while Sudan demands $36 a barrel plus $1 billion in rear payments since July.

Apart from oil, north and south also need to solve a long list of other conflicts such as marking the violent border and finding a solution for the disputed border region of Abyei. (Reporting by Hereward Holland; additional reporting by Khalid Abdelaziz; writing by Ulf Laessing; Editing by Marguerita Choy and Keiron Henderson)

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