Sudanese official cautions China on oil investments

May 17, 2007 (SHANGHAI) — A Sudanese central bank official told China on Thursday its oil investments could exacerbate conflicts in Sudan unless it pressed the government to engage local populations and share revenues.

China, which buys much of Sudan’s oil, has been under fire internationally for doing business with a regime condemned in the West for its actions in Darfur, but the banker’s comments were a rare critical voice coming from Khartoum.

“When you exploit oil and resources and nothing goes to the population, then you are financing the war against them with resources and that is negative,” deputy central bank governor Elijah Aleng told reporters on the sidelines of the African Development Bank’s annual meeting.

Much of Sudan’s oil is in the south of the country, where a 2005 deal ended a two-decade civil war between the Islamist government in Khartoum and mostly animist and Christian southern rebels.

But sharing oil revenues and the demarcation of a common border through an area straddling Sudan’s richest energy reserves have been sticking points of the pact.

Several members of the government were once senior members of the Sudan People’s Liberation Army, like Aleng, and remain sometime critics.

Aleng once headed the humanitarian wing of the main southern rebel group and said the south could again become restive if the local population felt it was being shut out of the region’s oil wealth.

“You know what is happening today in the Niger Delta in Nigeria?” he asked.

A surge in violence there has shut off about a fifth of Nigeria’s oil supply, led companies to evacuate staff and resulted in several hostage-takings, including those involving Chinese workers.

“We don’t want that to happen in the south, but that can happen very easily, when the population feel their government is not taking care of them,” Aleng said.

HUMAN FACE

Since the state oil group CNPC entered Sudan in 1995, it has been China’s largest overseas investment destination for energy projects, including oil exploration and production, refinery and petrochemical production as well as pump stations.

China now produces roughly 226,000 barrels of oil every day from three oil fields in Sudan, or about 3 percent of China’s demand.

In a separate conflict in Sudan’s western region of Darfur, more than 200,000 people are estimated to have died and about 2.5 million displaced in fighting between rebels and state-linked militias.

Rights groups have urged a boycott of Beijing’s 2008 Olympic Games over its oil investments in Sudan and its resistance to calls to send U.N. peacekeepers without Khartoum’s consent.

Aleng said Chinese investment was welcome, but its companies must be mindful of volatile local politics.

“We have invited the Chinese to invest in our oil industry. But we are advising them to invest with a human face,” he said.

“You come and exploit a resource, you are a part of the land, and those who belong to that land must get a part of the resource, a part of the cake. That is the natural logic,” said Aleng.

“When that is not done, you are creating a friction between the communities and the oil exploiters, in this case the government of China.”

(Reuters)