December 5, 2011 (KHARTOUM) – The Chinese government on Monday announced that it is sending its special envoy to the region for talks in Khartoum and Juba on the deadlock regarding oil.

FILE - Sudan President Al Bashir meets Chinese Special Envoy to Sudan, Liu Guijin during his official visit to Khartoum June 11, 2011 (Reuters)

The oil-rich South Sudan became an independent nation last July but is still locked in negotiations with its northern neighbor over many post-secession issues.

Khartoum is pushing for a quick agreement with Juba on how much the latter should pay it for using the infrastructure on its territories to transport and treat oil exported to the outside world.

All fees suggested by Sudan which fell between the ranges of $32-$36 per barrel were swiftly rejected by South Sudan.

The African Union High Level Implementation Panel (AUHIP) headed by former South African president Thabo Mbeki has tabled the option of South Sudan paying a percentage of its annual oil exports that would include the transit fees.

A row erupted last week by which Sudan initially threatened to close down the oil pipelines and later said it will seize a portion of the oil as payment. South Sudan warned that it will stop producing oil if that happens.

Sudan claims that South Sudan owes $727 million on four shipments of oil released and transferred through the oil installations in the north since July.

The veteran Chinese diplomat Liu Guijin will arrive in Khartoum on Thursday and then move to Juba for talks with officials there.

"China is concerned about the recent tensions between north and south Sudan, and in particular that negotiations over oil and related issues had stalled," Hong Lei, spokesman for China’s foreign ministry, said on Monday.

"We expect both sides to exercise calm and restraint, resolve disputes through consultations and negotiations and safeguard the peace between [Sudan] and South Sudan," Lei added.

He did not reveal any specific proposals Guijin is carrying but diplomats in Khartoum told Sudan Tribune that they expect him to come up with possible compromises for the two sides to review.

China depends on South Sudan, a new country long suspicious of Beijing’s ties with Khartoum, for nearly five percent of its oil imports.

The state-run China National Petroleum Corporation (CNPC) has pumped billions of dollars into developing oilfields in Sudan, 80 percent of which lie in the south.

This may be the reason why the Chinese ambassador in Sudan Luo Xiaoguang last week condemned reports that Khartoum will stop oil exports coming from South Sudan.

Xiaoguang described Khartoum’s decision as “very serious and unjustified”.

He further told the pro-government al-Rayaam newspaper that there is no reason to stop the exporting of oil as long as there are negotiations now underway between the two countries in Addis Ababa.

The Chinese official called on the the two countries to engage in serious dialogue to reach agreement on outstanding issues particularly the oil dossier.

(ST)