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Chinese firms reportedly keen to expand in South Sudan
FINANCE & INVESTMENT
CHINA is reportedly interested in expanding investments in South Sudan’s oil sector. Rep- resentatives of both countries gathered in Juba last week to discuss the matter, according to Under-Secretary of the South Sudanese Petro- leum Ministry Mayen Wol.
In remarks broadcast by South Sudan Broad- casting Corp. (SSBC), Wol said Petroleum Minister Awow Daniel Chuang had met with China’s ambas- sadortoJuba,HuaNing,todiscussco-operationonoil projects. He said Hua had informed Chuang that Chi- nese oil companies were looking for ways to expand their operations in South Sudan. The under-secretary didnotsaywhetherChineseinvestorswereeyeingany specific new projects. He stressed, though, that Juba was eager to work with Beijing on this front. “We are going to be friendly to the Chinese companies so that they can extract the oil because this oil is beneficial to all of us,” he remarked.
State-owned Chinese companies have been active in the area now known as South Sudan for more than two decades. The first to venture into the country was China National Petroleum Corp.
(CNPC), which became the leader of a consortium known as Greater Nile Petroleum Operating Corp. (GNPOC) in the mid-1990s. Sinopec later teamed up with CNPC to set up another consortium, Dar Petroleum Operating Co. (DPOC).
When GNPOC and DPOC began operating, their fields were still under the control of Suda- nese authorities in Khartoum. South Sudan’s split from Sudan in 2011 did not lead CNPC and other Chinese investors to abandon these assets. Instead, the Chinese firms worked to establish ties with the new administration in Juba and with South Sudan’s state-owned Nilepet. They also sought to maintain those relations and pro- tect their assets in South Sudan despite the out- break of civil war in 2013.
This strategy has been effective, insofar as the CNPC-led consortia now account for 100% of South Sudan’s oil production and are moving for- ward with exploration campaigns. Chuang noted earlier this year that the country was extracting about 185,000 barrels per day of crude and hoped to push output up to 200,000 bpd in 2020.™
Ship-to-ship transfers point to Chinese purchases of Iranian oil
POLICY
AN insight into how much Iranian oil might be making its way to China via ship-to-ship trans- fers, in defiance of US sanctions, has been given by new tracking data.
Oil imports subject to such transfers and absorbed by China last month reportedly surged. Some 910,000 tonnes of crude, three times as much as in August, was offloaded at Chinese ports after being transferred in the South China Sea, accord- ing to ship-tracking data compiled by Bloomberg.
It is not clear where this oil derived from, but moving crude from one vessel to another at sea is a common way of disguising cargo origins and China, the world’s biggest crude importer, has been struggling to replace lost barrels from Iran and Venezuela, also hit by US sanctions this year.
Oil cargoes from the US arriving in China also dropped markedly last month, the data show. Bei- jing imposed tariffs on American oil for the first time on September 1 as the trade war worsened.
“I think it’s highly likely that these ship-to-ship and Malaysian volumes are Iranian or Venezuelan crude,” Bloomberg quoted director of the China Energy
ProgrammeattheOxfordInstituteforEnergyStudies, Michal Meidan, as saying. “But of course, the whole point here is to make it hard to be sure.”
Washington is not likely to succeed with its campaign to entirely drive Iranian oil exports off world markets and Iran is expected to maintain its shipped crude consignments at 400,000 bar- rels per day in the second half of 2019 and 2020, according to a Fitch Solutions Macro Research note cited by Rigzone on September 10.
“Despite all [Iran oil] exports now being sanc- tionable, volumes have continued to flow out of Iran to buyers in markets including China, Syria and Turkey,” the note said. “Exports have become increasingly difficult to track, with tankers rou- tinely turning off their transponders and perform- ing complex chains of ship-to-ship transfers.”
China has thrown Iran a “vital lifeline” and taken the lion’s share of exports in the period since sanctions waivers expired in May, according to the note. “This is not unexpected, given that Beijing and its state-backed enterprises have the greatest capacity to circumvent US sanctions,” it stated.™
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w w w . N E W S B A S E . c o m Week 40 09•October•2019