Sudan bolsters refining with China’s help
By CARMEN J. GENTILE, UPI
July 16, 2006 — Sudan’s is expanding oil production at its main refinery up to 100,000 barrels per day thanks in part to China National Petroleum Corp. which owns 50 percent of the facility.
The other 50 percent of the refinery is owned by the Sudanese government.
Chinese investors said earlier this week that the $341 million expansion of the refinery was completed at the end of June and doubled the plants production capacity.
The refinery produces mostly gasoline, which would allow Sudan to increase its own domestic fuel supply and provide enough fuel to expand the country’s exports as well. Half the gasoline produced at the Khartoum refinery will be earmarked for export, said Sudanese and CNPC officials.
Diesel fuel production is also expected to increase significantly in the coming years, according to officials.
The increase in refinery production is a marked improvement for the fledgling fuel industry in Sudan, which in recent years has been courted by foreign investors like China hoping to tap into the country’s potential.
Sudan began its oil operations in 1999, when it began exporting crude oil. That same year, it recorded its first trade surplus. That increased oil production helped Sudan raise gross domestic product growth to 8.6 percent in 2004.
Of course Sudan didn’t create its promising oil industry all on its own. Like many African nations, Sudan needs foreign investors such as CNPC in order to extract the crude they couldn’t without outside assistance.
And Beijing has been happy to oblige. For the last decade or so, Chinese firms have scoured the globe for more oil to meet its ever-growing energy needs. In just the last 15 years, China went from oil self-sufficiency to importing about 3 million barrels per day. According to estimates, by the year 2020, China will have 140 million vehicles on the road, surpassing the car count in the United States.
With economic growth sailing at 10 percent annually, the country is scouring the globe to find new nations with whom to do petro-business.
Even if that means making deals with African leaders like Sudanese President Omar al-Bashir, who presided over 20 years of civil war that left millions dead and homeless.
Meanwhile, Sudan’s growing oil industry is attracting other types of international attention, particularly from the Organization of Petroleum Exporting Countries. Some OPEC leaders would like to be Sudan become a full-fledged member of the oil cartel.
Last month, Nigerian along with Middle East leaders backed a proposal to bring Sudan into the OPEC fold.
Sudan was given observer status in OPEC after it began production in 1999 and now appears ready to become a voting member of the group.
“Sudan is now qualified to join OPEC according to conditions set by the organization for membership,” Omer Mohammed Khail, Sudan’s undersecretary of energy and mining, said ahead of the Caracas meeting.
Some analysts, however, warn against Sudan joining OPEC as it could prove detrimental to the country’s efforts to rebuild after nearly two decades of civil war between the country’s Muslim north and Christian south. Future cuts in OPEC production will certainly annoy countries like the United States, which would end up footing the majority of the expense of rebuilding the war-ravaged nation.
“Sudan has no business approaching the world with a tin cup in one hand and a pistol in the other,” David Goldwyn, president of Goldwyn International Strategies consulting Firm, told United Press International in a recent interview.
Continuing political uncertainty could also hamper future oil production in Sudan, noted Goldwyn. The Sudanese government negotiated a peace deal with southern rebels in 2005, an accord that gives them autonomy for six years, after which a referendum is scheduled to vote on independence for the country’s south.
“The country will have trouble attracting international business if southern Sudan doesn’t remain a part of the government,” said Goldwyn.
(UPI)