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South Sudan seeks Chinese funding for oil pipeline

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April 22, 2012 (NAIROBI) – South Sudan intends to ask China to finance an alternative pipeline to export its oil, an official said on Sunday as prospects of resuming use of former transit route via neighbouring Sudan have been terminated by renewed conflicts.

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Pagan Amum (L), sec-gen of ruling SPLM in South Sudan, meets with Li Changchun, senior member of the Communist Party of China (CPC) in Beijing, capital of China, Oct. 21, 2011. (Xinhua/Ding Lin)

The request will be made during a five-day official visit South Sudan’s President Salva Kiir is due to start in Beijing as of Monday, according to Pagan Amum, the country’s lead negotiator and secretary-general of its ruling Sudan People’s Liberation Movement (SPLM).

In a statement to the Financial Times, Amum voiced optimism that China would respond to their request.

“It could be a consortium and China could join. They are positive, they are looking into it, they have agreed to provide South Sudan with technical assistance in building an alternative pipeline” he said.

Amum acknowledged that South Sudan is unlikely ever to resume crude exports through Sudan as already-strained relations between the two neighbours degenerated as of last week into a cycle of military confrontations in disputed border areas and heightened war rhetoric.

Sudan’s President Omer Al-Bashir announced following his country’s restoration of Heglig oilfields from South Sudan’s army, that Khartoum will never allow South Sudan to resume exports of its oil through Chinese-built infrastructure in the north. Juba claims it withdrew, although Khartoum says it was forced out.

“I don’t think our oil will flow through Sudan any more again,” said Amum.

Land-locked South Sudan has already shut down its oil production of 350,000 barrels per day in February following failure to agree with Khartoum on a fair transit charge.

China, the biggest investor in oil sector on both sides of the border, has been struggling to handle dual engagement with its old friends Sudan and the new rulers in South Sudan since the latter seceded in July last year, taking with it nearly 75 percent of the oil output of the once-united country.

A report produced this month by the International Crisis Group (ICG), a Brussels-based think tank, highlighted China’s dilemma in its pursuit of balanced relations with Khartoum and Juba, noting Beijing’s perceived failure to engage in diplomatic efforts to bring the two countries to agree on the oil issue as well as the impact this failure had on complicating its relations with Juba.

As the oil dispute with Khartoum worsened in February, Juba expelled the head of Chinese-led oil consortium Petrodar, accusing him of colluding with Sudan in diverting southern oil.

It appears, however, that South Sudan’s urgent need to resume oil production to save its weak economy has forced a re-think.

Amum said his country considered its ties with Beijing as “the most strategic relations South Sudan will have with any other country.”

The South Sudanese official acknowledged that building a new pipeline would take almost four years but insisted that his country can survive and cover cost of pipeline construction out of future oil sales.

“We are in a situation where we don’t need to be producing the oil now because we can have a future sale of oil – we have the reserves; everybody knows the oil will flow after the construction of the pipeline,” Amum said.

“Financing would not be a problem because we would be using future sales” he added.

(ST)

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  • 23 April 2012 11:30, by Diu J.Kuek

    This is the first priority to be make by the Govt of South Sudan is not a matter who will build it provide that our interest has be achieve.
    Good step I have confident this TERRORISTS of Sudan we will defeat them.

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    • 23 April 2012 11:43, by Chok Deng

      Good step,don’t allow our oil to be steal again by Bashir.Bashir and his groups are smart in stealing of oil.This time,let them steal their urine.No more stealing of our oil.Bye bye Great thief(Bashir).

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    • 23 April 2012 11:50, by Lorolokin

      Basher is the only stupid creature in the 21 centuary we ever witness,we will prefer to drink our oil than allow its flow through Khartoum , we will kick you Basher out of Sudan totally you just wait and see.
      Kinkak.

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    • 23 April 2012 15:36, by K1 Family

      congrats Comrade Kiir and Amum,i hope Beijing will respect this deal.

      more blessing from people of South Sudan.

      repondre message

    • 23 April 2012 23:49, by Bolman

      nothing at all there is no oilmoney to be invested to certain people again the Worldwide is now aware for what the so call Splm’s plansium is nobody is gonna accepted their request until the regiming change onto the power to change the blindfooling party of Splm and South Sudan nation will lives in peace forever without the triblism ruling party sorry for your misleading and misconception God mus

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  • 23 April 2012 12:00, by Deng

    Good move SPLA!!!!
    its time for South Sudan to make the old friends of Khartoum their prime enemies! for so long, I thought the Gvt of Kiir was dead but recently, I came to realize that he was using a low profile policy!!! same thing Chinese are doing now. in the next couple decades, China will be the Supper power. FUCK US because they want their interest first, then South sudan interest second.

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    • 23 April 2012 12:04, by Deng

      As said last year by His excellency President Salva Kiir, we cant be second class citizen. We dont deserve second interest!! Fuck the world persuaded us to withdraw from Heglig, but this time, the bombing of South Sudan is a testimony to the world that we invaded Heglig for a credible cause. next we will not only invade Heglig, but Khartoum.

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      • 23 April 2012 16:05, by SUPERMAN

        To: Deng
        Stop deceiving ur selves u have been defeated badly. American journalists reported ur big defeat from Pantio. u opted 2 war instead of building ur new nation and give food, shelter 2poor southerners who suffered the most during war. Pagan and other SS thugs do not want peace cause they r living in US,EU,Austwith their families , they come to South only 2 collect money,make problems

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  • 23 April 2012 13:11, by wad balad

    So the SPLM wants to destroy our oil facilities in higlieg and then want us to watch them construct an oil pipeline lol. Its very hard to build but very easy to destroy. Your oil field are right accross the border too u know. There will be no oil industry in southsudan period unless SPLM compensate for higlieg and seize support for the rebels. The faster you realise the faster we move forward

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  • 23 April 2012 13:31, by Rozenberg

    Article fails to include rest of FT article that says "International officials caution, however, that commercial rates on loans could bankrupt the country, while mortgaging future oil revenues risks using up all its petrodollars to secure oil exports, instead of financing sorely needed development in roads, health and education in one of the world’s poorest countries."

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    • 23 April 2012 16:28, by zulu

      Rozenberg
      I dont think being naive to these assumptions help so much. Speculators have no realistic appraisals and often times atenuate any foreseable promise of growth.
      Cases such as forensic science that rely on statistics for instance and in line with your citation, are proving unreliable and are meant to deter the resolve to find better alternative for oil transit

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  • 23 April 2012 14:04, by solider

    first did u solve the upcoming problem with kenya? kenya have occupied ILEMI TRAINGLE while sudan was busy with the civil war.ilemi is also oil rich land.it is also rich in gold and uranium .i belive it is wise for china to make sure everything is settled between ss and kenya before building that expensive pipeline

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    • 23 April 2012 15:50, by Lango2010

      why are calming about the border of Kenya and the building of pipeline, look here Egypt annex some part of the northern District but you kept silence, is it because the is no oil it
      you are just after resource but not the people
      what a big shame

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  • 23 April 2012 15:06, by mohammed ali

    Certainly there non-washed brains in SS,who can understand the implications of a new pipe-line!Unfortunately the ignorant SPLA theifs are not giving them a chance.Their days are numbered,they are tiying the rope around their neck with their own hands to strangulate themselves!Pathetic! There is no way for SS oil except through Sudan.They have weakened their negotiating position with their own hand

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    • 23 April 2012 16:35, by zulu

      Mohmed, I assume with certainty that your brain is very limited. How much have Taha, Nefi al Ma Nafir, and Omir el Beshit amassed just in royalties and here you are pointing your fingers to SPLA you dinghead. How much have they stowed away in Malasya?
      We are determined to use alternative routes through our friends in consort with their projects as a mega one to build east africa.

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  • 23 April 2012 16:31, by Ngiechjam

    Let’s tight up the diplomacy with the Chinese as well as other generous states so that when Arabs of Khartoum hears our cooperation with them they wail, now it is time 4 us To offer what ever thing we have in the South to purchase with.......... from Israel as I told this noise neighbors in sept that u ’ll soon call us Israel the enemy of Arabs,
    Now it is time 2 respect the RSS.

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  • 23 April 2012 18:20, by neutral legend

    Dear sons and daughters of Soth sudan...

    My request to you guys is to forget and forgive your internal problems i mean between your tribes. United you stand divided you fall. Your enemies are taking advantage of ur internal fights. I worked in unity for 1 year and i loved each and evry single day there. Oil will help you in near future but also please concentrate on the education of future

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  • 23 April 2012 18:32, by neutral legend

    generations..concentrate on agriculture by Gods grace south got plenty of fertile land. I hope you guys start de-weponization of all tribes. Dont commit mistakes learn from others mistakes. Its possible i know...i belive in you..all of you can make a difference..

    Be the change

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  • 23 April 2012 21:43, by AfroArabian

    CHIINA....? good for you...now let them think it over...building a route through Kenya..the mountains...an isolated region...mmmm....is it even feasible? so this was after kenya confirmed it CANNOT complete the LAMU project due to the massive budget it would require...well...hurry up, because we are coming after ur oil fields and shredding them to peices...all u will transfer is mareesa

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    • 23 April 2012 21:46, by AfroArabian

      oh...i forgot...u need the mareesa to reassure yourselves that u still have a future under kirr....so...what will u transfer...cow urine.?.u drink that for blessing..well...u can transfer the water from the nile....oyeeeeeeeee....see i solved the issue in the south for u

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  • 23 April 2012 23:15, by Northern Sudanese

    fertile land? south sudan is nothing more than another drc congo :D

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  • 23 April 2012 23:15, by Northern Sudanese

    Our celebrations after the heglig was retaken by our forces. these were good times........celebrations took place in cities all over sudan but this is the one in Khartoum in front of our military Headquarters
    http://www.youtube.com/watch?v=7cck...

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    • 24 April 2012 04:01, by zulu

      You know, when you believe in one way system, it is an illusion at times called Penumbra. you simply subject your conscience to that illusion as a tunnel vision. But South Sudan is going ahead with new things every week. Holistic approaches are being employed as opposed to modern trajectories. Mountain or no mountain are realities in the world as is Alaska pipe line completed in 3yrs after debates

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  • 24 April 2012 08:02, by philipdit wol

    This could have been a priority before Mr President Kiir an way it,s not too late please keep insists Bashir is now behalf in notorious manner otherwise we shall be end up with nothing in South Sudan.

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  • 24 April 2012 09:45, by Tahrir Brown

    Why not another State for you cannot befriend a friend of your enemy otherwise a downfall may occur on either of the sides. WATCHOUT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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