page_title: China–Sudan relations
section_title: Prospects of Oil
hierarchical_section_title: China–Sudan relations / Trade and Development / Prospects of Oil
caption_attribution_description: Polski: Pola naftowe i infrastruktura naftowa w Sudanie i Sudanie Południowym. English: Oil fields and infrastructure in Sudan and South Sudan.
context_page_description: China–Sudan relations refer to the bilateral relations between the People's Republic of China and the Republic of Sudan. China is currently one of Sudan's largest trade partners, importing oil and exporting low cost manufactured items as well as armaments into the country. Both states enjoy a very robust and productive relationship in the fields of diplomacy, economic trade, and political strategy. They formally established diplomatic relations on January 4, 1959 when Sudan formally recognized the sovereignty of the People's Republic of China and have since become close global allies, supporting each other in times of internal crises and international controversy such as during the Second Sudanese Civil War, the Darfur Crisis, and the Xinjiang Conflict. China continues to provide massive support to Sudan by developing its oil resources and supplying millions of dollars in loans, aid, foreign direct investments, and humanitarian assistance. In return, Sudan has become a reliable political and economic ally in the international arena, allowing China to maintain a significant stake in its oil sector.
context_section_description: Upon independence in 2011, South Sudan secured three-quarters of the oil held by the once unified nation which immediately caused a number of disputes, cross-border violence, and failed negotiation attempts. In order for the oil from South Sudan to be exported, it had to first travel to refineries in Khartoum and be transferred to port terminals in Port Sudan. The price of this transportation was unsettled before the separation of the state which caused disputes that escalated in January 2012 when the Sudanese government claimed that Juba owed $1 billion in unpaid fees. In response, the government of South Sudan accused Khartoum of stealing $815 million worth of oil from their territory. This quickly led to the shutdown of oil production in the south for six months until a partial agreement was reached in August 2012. Presidents of both countries agreed to restart oil exports and demarcate a demilitarized zone, setting the fee for oil transportation at $9.48 per barrel. The government of South Sudan also consented to a $3 billion payout to Khartoum as compensation for the loss of 75% of its oil resources. During this period, Sudan faced serious economic challenges, but it did not seem to negatively affect their relationship with China. As a matter of fact, in August 2017, it was reported that Chinese investments in Sudan's oil sector had surpassed $15 billion and that both countries remained committed to cooperating each other as Sudan was ready to overcome any obstacles in further Chinese investment and China was ready to face challenges regarding Sudan's debt and consequences from the separation of South Sudan.
caption: Location of Sudan and South Sudan's oil fields and infrastructure.
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