South Sudan on Wednesday said it has started reviewing all oil contracts signed by the government of neighboring Sudan before the region’s independence, one day after Juba expelled the head of a Chinese oil company.
Sudan and South Sudan are expected to resume oil talks by the end of this month after previous rounds failed to reach agreement on a fair charge to transport southern oil through Sudan’s territories, fueling tension and threats of war between the recently separated countries.
South Sudan’s government expelled on Tuesday the Chinese head of Petrodar, a consortium of China National Petroleum Corporation (CNPC) and Malaysia’s Petronas, on the grounds of “non-cooperation”, according to Pagan Amum, the secretary-general of the ruling Sudan People’s Liberation Movement in Juba.
Prior to the expulsion of PETRONAS chief, South Sudan threatened to expel Chinese companies operating in its territories if they are proven to be complicit with Khartoum in what Juba terms the stealing of South Sudan’s oil.
“They cannot have it both ways. Cooperate with Khartoum in stealing oil and at the same time pretends to be partners with us. It does not work like that” South Sudan’s oil minister Stephen Dhieu told Sudan Tribune on Wednesday.
“If any company wants to work in the republic of South Sudan, they have to respect terms of reference of the memorandum of understanding which they signed with us” Dhieu added.
He went on to reveal that his ministry had already started reviewing contracts, which he said were signed between Khartoum and oil companies before South Sudan’s independence.
“We are in a different era and under a complete different system. We are [an] independent state with complete authority in areas under territorial jurisdiction of the republic of South Sudan” he pointed out.
Dhieu accused some of oil companies of receiving instructions from Khartoum on issues taking place in South Sudan and not in Sudan. “This contravenes the terms of reference of the memorandum of understanding which we signed with them in December, 2011” he explained.
It is for this reason and other similar ones, Dhieu said, that the government of South Sudan “felt it would be better if individual members, especially some heads of the foreign oil companies who are not respecting the terms of reference be replaced. So we asked for replacement of the president of PETRONAS.”
Some Sudanese officials have argued that South Sudan’s threats against Chinese companies are part of a conspiracy to replace them with Western companies. China is the biggest buyer of Sudanese oil and has good relations with the government in Khartoum.