Sudan at the head of a global sweep to mop up world's oil resources
Declan Walsh in Khartoum
Wednesday November 09 2005
A tangle of pipes and metallic towers rises over the shimmering, rock-strewn desert north of the Sudanese capital Khartoum. The gleaming oil refinery is the jewel of Sudan's oil boom, the mid-point of a 900-mile pipeline from the southern oilfields to the Red Sea that is projected to pump 500,000 barrels a day by the end of this year.
But if the oil is African, the money and management are Chinese. Inside the refinery gates, Chinese engineers man the distillation towers, Chinese cooks serve rice and noodles in the canteen, and workers pedal between the giant oil drums on bicycles imported from Beijing.
"We like Sudan very much," said Zhao Yujun, 35, a manager with the state-owned China National Petroleum Corporation (CNPC), which built the sprawling plant five years ago. "China needs energy for economic growth. There is oil in Africa. That is why we have come here."
China is prowling the globe in search of energy sources. Oil executives and diplomats have signed a flurry of deals, from Canada to Kazakhstan. The scramble has triggered unease in Washington, where American conservatives worry about China's growing economic muscle, but has sparked an unprecedented engagement with Africa.
Chinese business is blazing a trail across the continent. Trade with China has almost tripled in five years. Railways in Angola, roads in Rwanda, a port in Gabon and a dam in Sudan have all been paid for with Chinese loans and built by Chinese contractors. Business with Nigeria and South Africa is booming. And this year China is expected to overtake the UK as Africa's third largest trading partner.
The driving ingredient is oil. China's flagship African project is in Sudan. Isolation from the west meant that Khartoum barely pumped a barrel of crude a decade ago. Now, after intensive Chinese investment, it has the third largest oil business in sub-Saharan Africa.
China shipped in thousands of workers to build the Heglig pipeline in record time, and a second pipeline is under construction. The Khartoum refinery - CNPC's first outside China - opened in late 1999, just in time for the 10th anniversary of the coup that brought military leader Omar al Bashir to power.
The gamble has paid off handsomely. Sudan is expected to earn more than $1bn in oil revenues this year and its economy is one of the fastest growing in Africa. Meanwhile, China has won a new ally to fuel its thirsty factories and exploding rate of car ownership.
"CNPC - your close friend and faithful partner" reads a dust-smeared billboard outside the Khartoum refinery showing grinning Chinese workers in hard hats.
"Our agreement is an example to others," said Mohamed Atif, the Sudanese deputy general manager. "The Chinese say they are communists and socialists but they are deeply involved in the capitalist system," he said.
Where western companies shy away because of corruption, conflict or the risk of losing their shirt, Chinese firms are plunging in. President Hu Jintao has dispatched diplomats to dangle large, low-interest loans before impoverished countries with the sole stipulation that work is done by Chinese contractors.
African governments also appreciate China's tendency to keep its nose out of domestic affairs. In contrast with the demands for transparency that accompany loans from international bodies such as the International Monetary Fund, Chinese help comes on a strictly "no questions asked" basis.
But human rights campaigners warn that this one-track expansionism offers succour to rogue leaders and undermines efforts to foster transparency in some of Africa's most notorious governments. Earlier this year, Angola's president, Jose Eduardo dos Santos, who presides over a famously oil-rich but poverty-stricken country, received a £1.1bn line of credit from Beijing.
Beijing also came to the rescue of Zimbabwe's embattled president, Robert Mugabe, presenting him with ornamental tiles for the roof of his palace and an honorary degree in recognition of his "remarkable contribution in the work of diplomacy and international relations".
"If you're a corrupt government that wants loans with no conditions, you will like the Chinese. But it's not good for the people of the country," said Sarah Wykes of Global Witness, a UK-based lobby group.
Western hostility towards Sudan's military regime paved the way for one of China's sweetest deals in Africa. In 1996, when the regime was an international pariah for sheltering Osama bin Laden and human rights abuses, CNPC bought shares in a government oil venture on highly favourable terms.
At the Khartoum refinery, Sudanese and Chinese co-workers communicate in a mix of Arabic, Chinese and English. In offices Chinese officials play with their mobile phones beside Muslim managers kneeling on prayer mats.
But in the city Sudanese businessmen grumble that Chinese projects give little and take much. "They bring everything from China - labour, materials, the lot," said one prominent trader who asked not to be named.
South Africans worry that cheap imports are swamping their textile industry. Others say that China is stingy with humanitarian aid and that its secretive culture fuels bribery and corruption.
But there are also hints that the blinkered "no questions asked" policy is shifting. China has deployed peacekeepers to UN missions in Liberia and Congo.
When Sudan's terrible rights record in Darfur came before the UN security council in March, Beijing was expected to veto it. Instead, to Khartoum's dismay, it abstained.
"It suggests the Chinese are becoming sensitive about their image," said Jemera Rone of Human Rights Watch. And we see that as a good thing."
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