Sudan reaches agreement with China's CNPC to revamp Khartoum refinery


China and Sudan have agreed to work together at Sudanese oil fields and a refinery to reverse the plummet in the East African country's production, Sudan's state news agency reported Monday.

Production has declined since the independence last year of South Sudan, where three quarters of Sudan's oil fields were located.

A deal to revamp the 100,000 bpd Khartoum refinery was reached over the weekend during talks between Sudanese Petroleum Minister Awad Ahmed Al Jaz and China National Petroleum Corp. (CNPC) vice president Wang Dongjin, state-owned Sudanese Media Center reported.

The refinery is a joint venture between the Sudanese government and CNPC, the largest oil-producing company operating in Sudan.

CNPC, which operates oil fields in Sudan and South Sudan, has been caught in the crossfire of tensions between the two countries.

CNPC hasn't returned calls or emails from Dow Jones Newswires seeking comment.

The news agency didn't disclose details of the amount of planned investments and expected output levels.

Sudan's oil production has nosedived to around 115,000 bpd from 500,000 bpd before the secession of South Sudan. The oil ministry is targeting to boost production to at least 150,000 bpd by the end of this year.

Mr. Al-Jaz and Mr. Wang also discussed plans to restart the shipping of South Sudanese crude through Sudanese pipelines and ports.

The Sudanese economy is trying to recover from a host of economic hardships emanating from the loss of oil fields as well as South Sudan's decision to halt transit oil shipments in January in dispute over oil transit fees.

Operations at the Khartoum refinery were also thrown into turmoil in January due to a lack of crude for processing after South Sudan halted shipments.

In September, the two former civil war foes bowed to international pressure and signed a peace accord, which is expected to pave the way for the resumption of oil shipments by the end of the month. Until January, China was the largest importer of crude from Sudan and South Sudan.

Dow Jones Newswires

Related News

From the Archive