China urges dialogue in South Sudan dispute with oil firms

China on Thursday urged
dialogue between South Sudan and Chinese oil firms following the
expulsion this week of the head of Chinese-Malaysian oil
consortium Petrodar, in its first comments on an escalating row.   



    Chinese oil firms are caught in a dispute between Khartoum
and the newly independent South Sudan over transport fees for
moving oil from the landlocked South to ports in Sudan.    



    On Tuesday, South Sudan expelled Liu Yingcai, the head of
Petrodar, the main oil firm operating in the new African nation,
citing lack of cooperation with the South's investigation of oil
firms suspected of helping Khartoum seize southern oil.    



   Petrodar has rejected the allegations and on Thursday the
Chinese government weighed in, calling for joint efforts to
resolve the dispute.   



    "China and South Sudan's cooperation is based on mutual
respect and mutually beneficial equality, which brings real
benefits to both peoples," Chinese Foreign Ministry spokesman
Hong Lei told a daily news briefing.    



    "We hope that relevant sides step up communication and
consultations and put an end to misunderstandings to benefit
long-term cooperation," he added.   



    Petrodar, which pumped 230,000 bpd and exported the southern
oil through a Sudan pipeline until the shutdown, has said it had
followed only southern instructions.   



    Juba has shut down its oil output of 350,000 barrels per day
to end the seizures by Sudan.   



    South Sudan's attack on Chinese interests is puzzling 
because China is the biggest buyer of its oil. Pagan Amum, South
Sudan's top negotiator for talks with Sudan over oil payments,
told Reuters that relations with China were good but added there
were difficulties with some oil companies.    



    Petrodar is a consortium of mainly Chinese state firms
Sinopec, Chinese National Petroleum Corp 
and Malaysia's Petronas. It runs oil fields in South
Sudan's Upper Nile state and also an export pipeline through
Sudan.   



    Many South Sudanese feel bitter about China because of its
support for Khartoum during decades of civil war between the
Muslim north and mainly Christian South that killed two million
people. The conflict ended only in 2005 with a peace agreement
that paved the way for southern independence in July.   



    South Sudan took three-quarters of Sudan's oil production
when it became independent but needs to export crude through a
northern pipeline and a Red Sea port.     



    Both states have failed to agree on transit fees, prompting
Khartoum last month to seize at least three southern oil
shipments at the Red Sea terminal.