News24

S Sudan kicks out head of oil company

2012-02-22 15:04

Juba - The head of the largest foreign oil company in South Sudan has been asked to leave the country over allegations he conspired with Sudan to steal the south's oil, South Sudan officials said on Wednesday.

Liu Yingcai, a Chinese national and the president of the Petrodar Operating Company, was notified on Monday that he had 72 hours to leave South Sudan, said Elizabeth James Bol, the deputy minister of petroleum and mining.

Petrodar is a consortium of oil firms operating in South Sudan that includes the national oil corporations of China and Malaysia. Petrodar did not immediately respond to requests for comment. Liu's ouster comes in the midst of the company's relocation of its headquarters from Khartoum, the capital of Sudan, to Juba, the capital of South Sudan.

South Sudan for months has accused its northern neighbour of stealing its oil, and southern officials now say Liu was in on the thefts. Barnaba Benjamin Marial, South Sudan's minister of information, said that a government investigation found that he was involved with the government of Sudan "in the conspiracy of getting the oil of South Sudan."

South Sudan declared independence from Sudan in July, and in the process inherited nearly three-quarters of Sudan's oil production. But all oil produced in the south must be exported through two pipelines in Sudan.

In addition to operating oil fields in South Sudan, Petrodar is responsible for the maintenance and operation of one of the two pipelines.

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.

New talks

South Sudan has called the move theft and accused Sudan of forcing foreign oil companies operating in the region to comply with the order. But now Marial said Petrodar was complicit.

Liu "got involved with Khartoum in helping to facilitate the construction of the tie-in pipeline", Marial said.

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 insisted Petrodar would not comply with orders to assist in its construction. But Marial says that assurance was not sufficient.

"How can a tie-in pipeline be built without the co-operation of the operating company?" he asked.

Marial says Liu also cooperated with a Sudanese order to deliver South Sudanese oil to Khartoum's customers.

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.

Oil has been a wellspring of tension between Sudan and South Sudan since the two countries split. The countries 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 the Sudanese pipelines and export facilities.

Negotiations have been complicated recently by South Sudan's insistence on resolving other post-secession issues, including border demarcation and the status of the disputed Abyei region.

New talks set to begin on Thursday have been postponed until March.