Rising China and Africa's development: oil
Rising China and Africa's development: oil

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Rising China and Africa's development: oil

7 What is the future for Chinese oil investment in Sudan and South Sudan?

Given the political pressures that China has faced in Sudan, as well as the operational difficulties and the recent fall in oil prices, it is sometimes difficult to understand why China persists with its operations in the Sudans.

Activity 5 Continued Chinese interests

In Video 5, Professor el-Battahani reflects on how Chinese oil companies have tried to manage their relationship and operations through the succession process and reflects on why, despite a tumultuous environment, China continues to engage with the Sudans. As you watch the video make notes on the factors that seem to be keeping the Chinese in Sudan.

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Skip transcript: Video 5 Navigating succession in Sudan

Transcript: Video 5 Navigating succession in Sudan

The role played by the Chinese government and oil companies was somehow not visible or not clear, because they were not in a position somehow to leverage all political parties as the Western countries. But they hoped for Sudan remaining united, because this would allow them to integrate the downstream production areas with the upstream, the pipeline areas, or the oil industry. And it would also ensure their continued interest in working with Sudan. But nonetheless, they also have what we may call plan B, in case South Sudan opted for secession. They hoped for maintaining amicable relations between the two to save the oil interests at that time, because Sudan oil almost provided about 7% for the Chinese needs in oil. Unfortunately, war broke immediately after the decision of South Sudan, and this had upset the Chinese government. The infrastructure of oil was destroyed, was damaged by the war. Added to that, also, Sudan rescinded on the debts that were due to China, and this has also culminated in the Chinese losing interest in continuing investing in the oil industry in the Sudan. As a result, they actually stopped investing in the oil industry. And also, they even stopped the completion of current development projects that they are undergoing. This was a sign that now, they are looking for other African countries to fill in the gap created by the Sudan in either African countries in oil or in other industrial areas. It's spurious to observe that despite the falling international oil prices and the ongoing conflict, China still wants to keep a foothold in the Sudan. This has to do actually with other extra economic interest in the Sudan social, cultural, political-- a number of private business sectors in the Sudan are now doing business in China. Cultural activities also are flourishing. Students, university students, are learning Chinese language. Confucius institutes are now being set up in a number of universities. And also, China, in addition to this, may have interest in the lands and also in exploring other mineral resources, not necessarily oil. But there were reports that Sudan is very rich in other minerals. Some of these reports talk about uranium, other things. So the Chinese, although there are signs of diminishing interest in Sudan, but nonetheless, they want to remain in the Sudan in case things may change. And they may in the future also increase their investments in oil or in other fields.
End transcript: Video 5 Navigating succession in Sudan
Video 5 Navigating succession in Sudan
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