South Sudan expels Chinese head of main oil firm - Yahoo! News

South Sudan has expelled the Chinese head of the country's largest oil firm Petrodar on charges of colluding with former civil war foe Sudan to "steal" millions of barrels of its oil, a minister said Wednesday.

"It is the first time in South Sudan's history to expel (someone)," Minister of Information Barnaba Marial Benjamin said after Chinese national Liu Yingcai was asked to leave the world's newest nation.

Benjamin said that the petroleum and mining ministry's decision to fire the head of the China-Malaysia-owned company followed an investigation into millions of barrels of oil that South Sudan claims Khartoum stole.

Last month Juba vowed to halt oil production of around 350,000 barrels per day until Sudan repaid 2.4 million barrels of southern crude it confiscated from pipelines running through the north to its Red Sea port.

South Sudan split from the north last year but while it has most of the oil, Khartoum controls the pipeline and has access to the sea, sparking a furious argument and fears of renewed conflict.

Juba has accused oil companies operating on its territory -- who until last year had previously been working with officials in Khartoum -- of underreporting the number of oil wells, and aiding the north's confiscation of crude.

Petrodar has previously rejected such accusations.

Before the shutdown, China relied on South Sudan for nearly five percent of its oil, and was seen as a key player in persuading both sides to come to an agreement, as Beijing is also an important ally of the Khartoum government.
However, repeated rounds of African Union-led talks have been fruitless, and last week Juba accused the north of taking another 2.6 million barrels of crude.

Benjamin said that he did not think the expulsion would damage relations with major oil buyer China.

"Why would it sour relations? The companies are still here and we are working with them," he told AFP.

The state-run China National Petroleum Corporation (CNPC) also operates in the grossly underdeveloped fledging nation, which is almost entirely dependent on oil revenues, accounting for 98 percent of the government budget.

Juba last week announced drastic austerity measures including halving all non-salary spending -- despite a bloated civil service and massive military.
While opposition leaders and aid agencies have urged South Sudan to reduce military spending, analysts fear that widespread cuts could spark revolt and an increase in rebel groups still threatening the new nation's stability.

South Sudan is already reeling from multiple crises, including hundreds of thousands fleeing an explosion of ethnic violence and rebel attacks, as well as tens of thousands of refugees fleeing civil war in the rump state of Sudan.

Juba and Khartoum are due to hold face-to-face talks again on March 6.