Sudan’s Referendum and Chinese and American Interests

Under the watch of the international community, the southern Sudanese independence referendum — six years in the making — was finally conducted on schedule from February 9-15. Sudan, which has been through over 50 years of civil war, now faces the possibility of being split up. This referendum could change the political map of Africa. Most observers expect that the referendum will result in the splitting of Sudan from one unit into two, one Sudan with Khartoum as its capital and another with Juba as its capital (the new country’s name has not yet been decided) — with the southern country holding the majority of oil reserves.

If southern Sudan gains independence, it will affect China’s oil interests. Since southern Sudan is more friendly with the West, it’s possible that its independence could pose a challenge to the investments and cooperation of the China National Petroleum Company (CNPC)and other such Chinese resource companies in their territory. Nevertheless, China has been maintaining relations with the authorities of southern Sudan: It sent a delegation of observers during the referendum period and has made contacts with leaders and authorities in the region. Last December, a high-level delegation of southern Sudanese authorities visited China.

In Sudan, China has a base of foreign oil, where its painstaking business efforts over many years have been comparatively successful. Statistics show that currently, China has over 30,000 people from over 100 companies working in northern and southern Sudan and Darfur. They are participating in engineering projects, technical cooperation, investment, etc. Currently, China possesses the largest, most complete industrial chain in Sudan, covering every area including exploration, extraction, piping and refineries.

From the long-range perspective, the strategic significance of China’s increased investment in the area lies not only in the long-term development of Sudan’s oil resources, but even more in the part this development plays in China’s strategy of developing oil resources throughout the whole of Africa. China’s process of African oil exploration extends gradually outward, with Sudan as a base. Of course, the dramatic rise in China’s demand for natural resources, as well as its increasingly deep involvement in Africa’s oil development, could result in conflicts with the interests of the United States.

In a book called Resource Wars: The New Landscape of Global Conflict, American futurist Michael T. Klare says that in the first decade of the 21st century, scarcity of resources will become the main source of international conflict. Future wars will certainly not erupt over differences in ideology; rather, they will break out over attempts to secure supplies of the most precious and ever-rarer natural resources. This is certainly not an instance of mere alarmism: Observing the exertions of China, the U.S., Japan and India as they contend for Sudan’s oil, one can see the seeds of such a struggle.

The foreign media consider Africa an important central zone, and that the area between Sudan and Chad in this zone’s interior is its most important part. This has thus become another important battlefront since the U.S. invasion of Iraq in 2003 — the source of a new cold war between Washington and Beijing over who will control oil supplies. Up to this point, Beijing has played its cards more astutely than Washington.

U.S.-Sudan relations have been tense for a long time. The U.S. listed Sudan as a state sponsor of international terrorism, and U.S. pressure on Sudan has never lifted for even a moment. From the signing of the Comprehensive Peace Agreement in 2005 to the 2011 referendum, this sequence of events has all been brought about under the dominance of U.S. influence.

On the surface, America’s enthusiasm for the referendum seems to come from its humanitarian purpose of finally ending Sudan’s civil war, but in fact, the U.S. hopes to gain greater oil interests in southern Sudan. The principal U.S. oil enterprises have known about Sudan’s oil wealth since the 1970s, and since then, wars over control of oil have not ceased. Chevron invested $1.2 billion in southern Sudan; it was their oil extraction work that triggered Sudan’s second civil war in 1983. Chevron became the target of multiple attacks and assassinations, and in 1984 it terminated its expansion plans.

In 1995, Chinese enterprises began arriving in Sudan and undertaking development. In 1997, the Greater Nile Petroleum Operating Company, in which CNPC holds a 40 percent stake, began developing the oil resources in southern Sudan that had been abandoned by Chevron and other multinational companies. Among these developments, the most important was CNPC’s participation in the Block 1/2/4 oil project, and from these areas were built oil transport pipes that lead to Sudan Harbor on the coast of the Red Sea, from whence the oil is loaded onto ships and transported to China.

The global energy market is undergoing a profound change. As the international oil price comes close to breaking $100 per barrel, the U.S. government is beginning to view China’s demand for energy as a new threat. Their anxiousness to act in this case is an attempt to compete with China, to get their share of the oil pie.

It cannot be denied that China is a latecomer to the struggle in the world oil market. Currently, the world’s 20 largest oil companies have already monopolized 81 percent of the world’s verified oil reserves. China’s desire to share currently available oil resources will naturally face obstruction and restriction by many factors as it operates within a global oil framework painstakingly built over the last hundred years by Western nations. Furthermore, as China continues to seek oil resources, competition will inevitably unfold between it and the United States and other Western countries.