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China pushing Sudan oil deal by Christmas

08 December 2011, 09:51

China - China's special envoy announced on Wednesday, that his country wants Sudan and South Sudan to resolve a row over oil transit fees by Christmas in order to avoid any potential disruptions of crude supply from the new nation.

South Sudan seceded from Sudan in July under a 2005 peace deal, taking about three-quarters of the formerly united country's roughly 500,000 barrels per day of oil output.

To export crude, South Sudan must still send it through pipelines that run north to a Red Sea port in Sudan. The two have still not agreed how much South Sudan should pay as a transit fee.

The dispute heated up last month when Khartoum said it would take a portion of South Sudan's government's oil exports to make up for arrears it says its southern neighbour owes.

China's special envoy Lui Gui Jin - sent to help resolve the row - said the Asian nation was eager for a resolution. China is a major buyer of oil from both countries.

"We wish that the oil production will not be negatively affected and that the talks between the north and south over oil could result, so that before the Christmas holiday you have reached a good agreement," he told reporters in Juba.

"China is open to accept any agreement you reach between the two brothers across the border," he added.

South Sudan issued a tender offering 5.4 million barrels of Dar Blend crude shortly after exports resumed, traders said on Wednesday. A one-million-barrel Dar Blend cargo was loaded on trader Vitol's oil tanker on Sunday, they said.

South Sudan's foreign affairs spokesman Mathiang Ring said he believed the Chinese mediation could help settle the dispute.

"They are here to try and calm down the situation to try to create a good environment for the two sides. The details of what to do will come next," he told Reuters.

The United States joined other international mediators on Tuesday urging Khartoum and Juba to quickly resolve the dispute.

The drop in oil revenues has hit the flow of foreign currency into Sudan, pushing up the price of imports and fuelling high inflation.

China has sought to maintain good ties with both countries since South Sudan declared independence from its larger and long-dominant northern neighbour, the culmination of a 2005 peace deal that ended one of Africa's longest and deadliest wars. Some two million people died in the conflict.

- Reuters

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