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China's ties to Sudan oil raise the stakes in civil war

LEAL, Sudan -- On this parched and dusty African plain, China's largest energy company is pumping crude oil, sending it 1,000 miles upcountry through a Chinese-made pipeline to the Red Sea, where tankers wait to ferry it to China's industrial cities. Chinese laborers based in a camp of prefabricated sheds work the wells and lay highways across the flats to make way for heavy machinery.

Only 7 miles south, the rebel army that controls much of southern Sudan marches troops through this sun-baked town of mud huts. For years, the rebels have attacked oil installations, seeking to deprive the Sudan government of the wherewithal to pursue a civil war that has killed more than 2 million people and displaced 4 million in the past two decades. But the Chinese laborers are protected: They work under the vigilant gaze of Sudanese government troops armed largely with Chinese-made weapons, a partnership of the world's fastest-growing oil consumer with a pariah state accused of fostering genocide in its western Darfur region.

China's transformation from an insular, agrarian society into a key force in the global economy has spawned a voracious appetite for raw materials, sending its companies to distant points of the globe in pursuit -- sometimes to lands shunned by the rest of the world as rogue states. China's relationship with Sudan has become particularly deep, demonstrating that Beijing's commercial relations are intensifying human rights concerns outside its borders and clashing with US policies and interests.

Sudan is China's largest overseas oil project. China is Sudan's largest supplier of arms, according to a former Sudan government minister. Chinese-made tanks, fighter planes, bombers, helicopters, machine guns and rocket-propelled grenades have intensified Sudan's north-south civil war. A cease-fire is in effect and a peace agreement is expected to be signed by year-end. But the fighting in Sudan's Darfur region rages on, as government-backed Arab militias push African tribes off their land.

China in October signed a $70 billion oil deal with Iran, and the ties between those two countries could complicate US efforts to isolate Tehran diplomatically or pressure it to give up its ambitions for nuclear weapons. China is also pursuing oil in Angola.

In the case of Sudan, Africa's largest country, China is in a lucrative partnership that delivers billions of dollars in investment, oil revenue, and weapons -- as well as diplomatic protection -- to a government accused by the United States of genocide in Darfur and cited by human rights groups for massacring civilians and chasing them off ancestral lands to clear oil-producing areas. The country once gave haven to Osama bin Laden and is listed by Washington as a state supporter of terrorism. US companies are prohibited from investing there.

Part of a broader push by China to expand trade and influence across the African continent, its relationship with Sudan also demonstrates the intensity of China's quest for energy security.

From Kazakhstan to the Middle East, past pursuits have ended in failure as Chinese firms have been aced out by the multinational titans that dominate the energy business. Japan appears set to claim Siberian stocks that China once thought were in hand. The US-led war in Iraq has thrown Chinese oil concessions in that country into doubt.

The pressure to find new sources of oil has grown as China has swelled into the world's second-largest consumer and as production at the largest of its domestic fields is declining. According to government statistics, China's imports have grown from about 6 percent of its oil needs a decade ago to roughly one-third today and are forecast to rise to 60 percent by 2020.

China National Petroleum Corp. owns 40 percent, the largest single share, of the Greater Nile Petroleum Operating Co., a consortium that dominates Sudan's oil fields in partnership with the national energy company and firms from Malaysia and India.

From its seat on the United Nations Security Council, China has been Sudan's chief diplomatic ally. In recent months, the council has neared votes on a series of resolutions aimed at pressuring Sudan's predominantly Arab government to protect the African tribes under attack in Darfur and stop support for militias by threatening to sanction its oil sales. China has threatened to veto such actions.

''China has a long tradition of friendly relations with Sudan," Wang Guangya, China's ambassador to the UN, said in a recent interview in New York. He confirmed China's veto threats, though he dismissed as ''categorically wrong" suggestions that oil interests were a factor, asserting that the resolutions would have eliminated the Sudan government's incentive to cooperate. China, itself often criticized on human rights issues, has a philosophical predisposition against outside pressure.

Human rights advocates and opponents of the Sudanese government portray China's role in different terms: Just as colonial powers once supplied African chieftains the military means to maintain control as they extracted natural resources, China is propping up a rogue regime to get what it needs.

''The Chinese calculation is to consolidate and expand while Sudan is still a pariah state," said John Ryle, chairman of Rift Valley Institute, a Nairobi-based research group that focuses on East Africa.

One of the poorest countries in the world, Sudan has long aimed to extract oil riches but lacked the necessary capital. It needed the help of deep-pocketed outsiders.

Sudan's bloody north-south conflict began long before China arrived, but oil has dramatically increased the stakes. The war is a struggle over the resources of the south, pitting the mostly Muslim, Arab elite that runs the government in Khartoum against the largely Christian and animist African tribes.

For years, the government lacked the arms to vanquish the Sudan People's Liberation Army, the rebel group that controls much of the south. With the dawn of oil production in 1999, Sudan's government began collecting $500 million a year in revenue. About 80 percent went to buy weapons, said Lam Akol, who was Sudan's transportation minister from 1998 to 2002 and is now a rebel commander.

A study by PFC Strategic Studies concluded that the Sudan government could collect as much as $30 billion in total oil revenue by 2012, with the potential for much more if exploration succeeds.

As the oil began to flow, Sudan relied on Chinese assistance to set up three weapons factories near Khartoum, said Ryle. Human rights groups say oil receipts have helped pay for a government-led scorched-earth campaign.

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