February 24th, 2012 | Shanghai Daily Call for talks after South Sudan kicks out Chinese oil firm chief
CHINA said yesterday it hopes talks will remove any misunderstanding with South Sudan after the Chinese head of the largest foreign oil company in the country was kicked out over allegations he conspired with neighboring Sudan to steal the south’s oil.
Foreign Ministry spokesman Hong Lei said China had seen the reports of Liu Yingcai’s expulsion.
“We hope the parties involved can step up communication and coordination to diminish misunderstandings in a bid to foster long-term cooperation,” Hong said at a regular news briefing.
Liu is president of Chinese-Malaysian oil consortium Petrodar, the main oil firm operating in the new African nation. South Sudan officials say Liu was notified on Monday that he had 72 hours to leave the country.
Oil has been a source of tension between Sudan and South Sudan since the countries split in July. They have held bitter negotiations over the separation of their once-unified oil industry but are far apart on what South Sudan should pay to use Sudanese pipelines and export facilities. South Sudan inherited nearly three-quarters of Sudan’s oil production but all oil it produces must be exported through two pipelines in Sudan.
Petrodar is a consortium established by the China National Petroleum Corporation and Malaysia’s Petronas. Besides operating oil fields, Petrodar is responsible for the maintenance and operation of one of the pipelines.
Liu’s expulsion comes in the midst of the company’s relocation of its headquarters from Khartoum, capital of Sudan, to Juba, capital of South Sudan.
South Sudan for months has accused its northern neighbor of stealing its oil. Its minister of information, Barnaba Benjamin Marial, said a government investigation found Liu was involved with the government of Sudan “in the conspiracy of getting the oil of South Sudan.”
South Sudan in January ordered the shutdown of its oil production after Sudan announced it would levy an unspecified percentage of South Sudan’s oil as an “in kind” payment for unpaid pipeline transit fees.
Sudan also announced the completion of a tie-in pipeline which would divert around 120,000 barrels of oil per day to processing facilities in Khartoum.
In a letter sent to South Sudan’s Ministry of Petroleum and Mining on January 16, Liu informed the ministry of Khartoum’s intention to build the pipeline but said Petrodar would not comply with orders to assist in its construction. Marial says that assurance was not sufficient.
Prior to South Sudan’s oil shutdown, Petrodar estimates it was producing around 230,000 barrels of oil per day – around 65 percent of South Sudan’s estimated daily output of 350,000 barrels.