China and the oil industry in Sudan

  • In Sudan, the government continues to sponsor the slaughter and dispossession of tribes in the western region of Darfur. But Sudan's oil supplies are irresistible to China, the world's fastest-growing oil consumer. The China National Petroleum Co. is a big investor in Sudan's oil fields and owns most of an oil field in southern Darfur. CNPC and the Sinopec Corp., another Chinese state-owned firm, helped build a newly opened pipeline from the south -- where much of Sudan's oil is located -- to Port Sudan. China also is a major arms supplier to Sudan and has used its U.N. Security Council clout to protect Sudan from global pressure and weaken threats of oil sanctions.
    - From the Washington Post article on China's Unsavory Friends, April 23, 2006
  • By the time the world awakened to the slaughter here, China was already funneling money into Khartoum. Beijing's investments in Sudan now total around $4 billion. With a 40% stake each in the Greater Nile Petroleum Operating Co. and Petrodar, state-owned China National Petroleum Corp. owns the largest shares of both of Sudan's national oil consortia. And in 2005, Beijing purchased more than half of Sudan's oil exports. China now relies on Khartoum for about one-tenth of its massive oil needs, placing Sudan just behind Saudi Arabia and Iran as China's largest energy supplier by volume. It is an unholy alliance.
         - From the Wall Street Journal op-ed on China's Crude Conscience, August 10, 2006, by Ronan Farrow
  • Oil revenue is a crucial source of income for the Sudanese government and is essential to the funding of the government's military operations, and an asset of exceptional strategic importance to the regime... According to a recent report of the U.S. Department of Energy, "With the start of significant oil production (and exports) beginning in late 1999, . . . . Sudan's economy is changing dramatically, with oil export revenues now accounting for around 73% of Sudan's total export earnings. [Energy Information Administration, U.S. Department of Energy, Sudan Country Analysis Brief, July 2004.]
    - From the Yale-Lowenstein report
  • Oil revenue has made the all-important difference in projected military spending. The president of Sudan announced in 2000 that Sudan was using the oil revenue to build a domestic arms industry. The military spending of 90.2 billion dinars (U.S. $ 349 million) for 2001 was to soak up more than 60 percent of the 2001 oil revenue of 149.7 billion dinars (U.S. $ 580.2 million).
    - From theYale ACIR report, quoting Human Rights Watch, " Sudan, Oil, and Human Rights," 2003
  • Sudan’s oil wealth has played a major part in enabling an otherwise poor country to fund the expensive bombers, helicopters and arms supplies which have allowed the Sudanese government to launch aerial attacks on towns and villages and fund militias to fight its proxy war [in Darfur]. By earning increasing oil revenues, the Sudanese government continues to be in a position to deploy considerable resources to military activities – be it in the form of paying salaries, or acquiring equipment, such as helicopter gunships, armaments, and associated hardware. The government has used increases in oil revenues to fund a military capacity that has in turn been used to conduct war in Darfur, including carrying out violations of international human rights and humanitarian law.
    -     From the Yale ACIR report, quoting Amnesty International, "Arming the Perpetrators of Grave Abuses in Darfur," November 2004

PetroChina

  • Click here to read the detailed report on "PetroChina, CNPC, Sudan: Perpetuating Genocide" by the Sudan Divestment Taskforce.
  • The China National Petroleum Company (CNPC) is wholly owned by the Chinese government and owns a 40% stake in the Greater Nile Oil Project. GNOP was set up by the Sudanese government and includes, among other investors, Sudapet, the national oil company. CNPC operates interests in the Sudanese oil industry with Sinopec, Petronas, ONGC, and other investors, and is not only active in the GNOP, but also has stakes in Petrodar and other oil blocks in Sudan. When CNPC attempted to go public on the New York Stock Exchange in 1999, public criticism over its holdings in Sudan forced it to create a subsidiary, PetroChina, which went public instead. At the time of its creation, PetroChina was 90% owned by CNPC and was comprised of CNPC’s domestic holdings. When PetroChina was created, it inherited $15 billion in debt from CNPC, some of which was incurred in respect to its Sudan activities. There is a large overlap between the management and the board of PetroChina and CNPC. This creates doubt that there exists a firewall between the two companies. The ACIR perceives that the separation between these two companies is largely cosmetic. Companies should not be rewarded for creating lists of subsidiaries that purposefully do not directly own controversial assets owned by the parent company.
    - From the    Yale ACIR report

Sinopec (aka China Petroleum)

  • China Petroleum & Chemical Corporation (Sinopec Corp.) was set up in 2000 as a publicly traded company by the state-owned China Petrochemical Corporation (Sinopec Group). 67.2% of Sinopec Corp. is owned by Sinopec Group. Sinopec Group is the unlisted parent company of Sinopec Corp. This situation is similar to CNPC’s relationship to PetroChina. It is one of the largest oil companies in China today. Sinopec’s involvement in the Sudan is three-fold. First, through its subsidiary, ZPEB International, which is one of the largest oil engineering service providers in Sudan. Second, through its subsidiary Sinopec International Petroleum Service Corp. (SIPSC), which is Sinopec Group’s international overseas and engineering and service arm. Third, through a direct 6% ownership share in Petrodar.
    - From the    Yale ACIR report

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