A China National Petroleum Corp refinery plant. [File photo]
In the mid-1990s, the China National Petroleum Corporation (CNPC or PetroChina) started doing business in Sudan, the war-torn country in northeastern Africa. Throughout the following two decades, thanks to a modern petroleum industry system established with help from PetroChina, Sudan changed from one of the poorest countries in the world to one with a rapidly growing economy.
But ever since South Sudan gained its independence from Sudan in 2011, the chaotic political situation has mired the petroleum industry; PetroChina faces not only a heavy deficit, but also security threats.
Once an example of success
The PetroChina petroleum project in Sudan was once praised as the most successful example of a Chinese enterprise doing business abroad.
In the 1960s, due to a lack of capital and technology, the Sudanese government invited Italian, British and American companies to invest in Sudan. In 1997, after the U.S. imposed comprehensive economic, trade and financial sanctions against Sudan, Western petroleum companies left the country.
At that time, China had just become a net importer of petroleum. In 1995, Sudanese President Omar Hassan Ahmed al-Bashir visited China and spoke with the Chinese government about the possibility of inviting Chinese oil companies to Sudan and to help the country establish a full-scaled petroleum industry.
In the decade that followed, PetroChina was gradually authorized to develop Block 6, Block 1/2/4, Block 3/7, Block 15 and Block 12 in the Muglad Basin. In 1997, PetroChina and its partners formed a joint operating company – the Greater Nile Petroleum Operating Company (GNPOC).
In 1999, the Greater Nile Oil Pipeline, an important oil pipeline in Sudan, was completed. The 1,506 kilometers pipeline begins at the Heglig oil field in South Sudan and extends to the Port Sudan crude oil refinery on the Red Sea, via the Nuba Mountains and Khartoum.
Win-win for Sudan and PetroChina
During the period of cooperation between PetroChina and Sudanese government, PetroChina not only invested capital in the country's petroleum industry but also helped train local oil workers and sponsored Sudanese oilmen to work in Iraq and Libya.
Cumba Munda, counselor of the Embassy of the Republic of South Sudan in China, said during an interview with a Chinese magazine that "PetroChina is an important partner for South Sudan, which plays a crucial role in the country's petroleum industry."