For the first time in the country’s brief history, South Sudan has expelled a foreign national from their country. Liu Yingcai, the Chinese head of Petrodar, was given 72 hours to leave the country following an investigation into neighboring Sudan’s alleged theft of $815 million dollars worth of oil.
As justification for the expulsion, the government in Juba cited a lack of cooperation in the South’s ongoing investigation of oil firms suspected of helping Khartoum seize southern oil, as well as Petrodar’s alleged collusion with the Sudanese government to steal millions of barrels worth of oil.
Petrodar is owned by major companies including Sinopec, Chinese National Petroleum Corp and Malaysia’s Petronas, and is the biggest oil company operating in South Sudan. At 230,000 barrels per day, the conglomerate pumped two thirds of South Sudan’s total daily output, which would then be exported through a Sudan pipeline. Petrodar claims to have followed the South Sudanese government’s instructions in the dispute over the oil seizure.
The oil was reportedly seized by Khartoum due to unpaid transit fees from South Sudan. Oil makes up 98% of South Sudan’s government budget, and Sudan has the advantage of being landlocked South Sudan’s only export route for the coveted resource. No formal agreement over how much South Sudan would pay for the right to export through Sudan, which counts China as the biggest customer of their own oil.
The lack of an agreement over fees is the reported reason why three shipments were seized at Red Sea terminal in Sudan.
Meanwhile, South Sudan’s Information Minister Barnaba Marial Benjamin claimed that the expulsion would not hurt ties between China and the world’s newest country. “Why would it sour relations? The companies are still here and we are working with them,” Benjamin told the AFP.
In a daily press briefing session, Chinese Foreign Ministry spokesman Hong Lei said, “China and South Sudan’s cooperation is based on mutual respect and mutually beneficial equality, which brings real benefits to both peoples.”
“We hope that relevant sides step up communication and consultations and put an end to misunderstandings to benefit long-term cooperation,” Hong added.
Responding in drastic fashion last month, the South Sudanese government in Juba declared it would halt all oil production in the country until Sudan repaid 2.4 million barrels worth of southern crude confiscated from pipelines that ran through the north to a Red Sea port. South Sudan declared that it would halve spending on everything in the country (besides government salaries) to try to compensate for the loss in total revenue.
Multiple African Union-led talks between South Sudan and Sudan have proved to be of little help, with leaders in Juba further accusing Sudan of stealing another 2.6 million barrels of crude last week.
South Sudan’s Vice-President Riek Machar claimed the loss of oil revenues would result in the stalling of the country’s development for several years, but that basic services would still be available for the country’s citizens.