US orders PetroChina not to refine Sudanese oil
by Eric Watkins
The US government, aiming to increase pressure on the government of Sudan, has warned PetroChina not to process Sudanese crude oil at its newly launched 200,000 b/d Qinzhou refinery in China’s southwestern Guangxi region, according to media reports.
“There is a freeze on Sudanese crude into the new plant, as it is under the US-listed PetroChina, not the parent company CNPC which produces crude in Sudan,” Reuters reported, citing an industry official it said had direct knowledge of the issue.
The Reuters report coincided with a statement by the Sudan Troika – the US, UK, and Norway – on the final year of the Sudan's Comprehensive Peace Agreement (CPA) signed in 2005.
“We remain deeply concerned by the Government of Sudan’s use of aerial bombings and local militias,” the troika said July 9, adding that “a tremendous amount of work is required to ensure continued peace and stability in Sudan beyond the expiry of the CPA.”
Analyst IHS Global Insight said that Washington’s decision over the Chinese refinery may have been prompted by sustained divestment pressure by groups such as the Massachusetts Coalition to Save Darfur Inc. on institutional investors in PetroChina.
“With the Qinzhou refinery recently having started test-runs, which require imports of crude cargoes, pressure from international organizations could again be intensifying,” IHS Global Insight said.
The US Departments of State and Treasury did not immediately respond to a request by OGJ for confirmation of the Reuters report. However, the US government – which began sanctions against Sudan in 1997 – is aware of the Chinese refinery’s importance to the Sudanese economy.
“There have been challenges resulting from US sanctions,” the Dept of the Treasury said in a report last year, adding that Sudan’s petroleum sector has been hurt by “a lack of access to US and western expertise and refining, which specialize in the Dar blend of heavy crude produced in Sudan.”
“Because of the lack of access to the United States, Sudan has increasingly turned to Asian companies entering the Sudanese petroleum market,” the Treasury report said.
The Treasury report also noted that “oilfields that produce the profitable Nile Blend are maturing, and the new Dar blend crude had a weak debut – its high acidity makes it a challenge for many refineries to process, depressing its price on the world market.”
The Qinzhou refinery is configured to treat Dar Blend and Nile Blend crudes which are imported from Sudan, where China's state-owned China National Petroleum Corp (CNPC) – PetroChina’s parent company – has a major presence in the upstream sector.
The Qinzhou refinery received its first crude oil cargo last December, CNPC said in its official newsletter. The cargo totaled 100,000 metric tons, CNPC said, without elaborating on the crude's origin.
However, China Securities Journal last month reported that PetroChina, which planned to put its Qinzhou refinery into operations on June 29, already had an inventory of one million tons of crude oil from Sudan.
Other reports say Sudan has imported as much as 225,000 b/d of Sudanese crude over the past five months.
PetroChina began test runs at the Qinzhou refinery in late June, and it plans to enter commercial runs around the end of August. Output at the refinery is expected to reach 7 million tonnes a year, including gasoline, gasoil, naphtha, LPG and other petrochemical products.
Last September, Chinese media reported that Qinzhou Port Coastal Industrial Investment Co. Ltd. would be in charge of the construction of a 300,000-ton navigation channel for PetroChina's oil refinery and storage project.
At a total investment of RMB1 billion, the navigation channel – measuring 38 km long, 320 m wide, and 25 m deep – is scheduled to complete by 2011.
US sanctions, issued in 1997, state that “US persons are prohibited from engaging in any transactions or activities related to the petroleum or petrochemical industries in Sudan without authorization from OFAC (Office of Foreign Assets Control).
“This prohibition extends to the entire territory of Sudan, including Southern Sudan. The prohibition also includes facilitation by US persons of such transactions or activities undertaken by non-US persons.”
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posted by: noreply@blogger.com
100714 :US orders PetroChina not to refine Sudanese oil
by Eric Watkins
The US government, aiming to increase pressure on the government of Sudan, has warned PetroChina not to process Sudanese crude oil at its newly launched 200,000 b/d Qinzhou refinery in China’s southwestern Guangxi region, according to media reports.
“There is a freeze on Sudanese crude into the new plant, as it is under the US-listed PetroChina, not the parent company CNPC which produces crude in Sudan,” Reuters reported, citing an industry official it said had direct knowledge of the issue.
The Reuters report coincided with a statement by the Sudan Troika – the US, UK, and Norway – on the final year of the Sudan's Comprehensive Peace Agreement (CPA) signed in 2005.
“We remain deeply concerned by the Government of Sudan’s use of aerial bombings and local militias,” the troika said July 9, adding that “a tremendous amount of work is required to ensure continued peace and stability in Sudan beyond the expiry of the CPA.”
Analyst IHS Global Insight said that Washington’s decision over the Chinese refinery may have been prompted by sustained divestment pressure by groups such as the Massachusetts Coalition to Save Darfur Inc. on institutional investors in PetroChina.
“With the Qinzhou refinery recently having started test-runs, which require imports of crude cargoes, pressure from international organizations could again be intensifying,” IHS Global Insight said.
The US Departments of State and Treasury did not immediately respond to a request by OGJ for confirmation of the Reuters report. However, the US government – which began sanctions against Sudan in 1997 – is aware of the Chinese refinery’s importance to the Sudanese economy.
“There have been challenges resulting from US sanctions,” the Dept of the Treasury said in a report last year, adding that Sudan’s petroleum sector has been hurt by “a lack of access to US and western expertise and refining, which specialize in the Dar blend of heavy crude produced in Sudan.”
“Because of the lack of access to the United States, Sudan has increasingly turned to Asian companies entering the Sudanese petroleum market,” the Treasury report said.
The Treasury report also noted that “oilfields that produce the profitable Nile Blend are maturing, and the new Dar blend crude had a weak debut – its high acidity makes it a challenge for many refineries to process, depressing its price on the world market.”
The Qinzhou refinery is configured to treat Dar Blend and Nile Blend crudes which are imported from Sudan, where China's state-owned China National Petroleum Corp (CNPC) – PetroChina’s parent company – has a major presence in the upstream sector.
The Qinzhou refinery received its first crude oil cargo last December, CNPC said in its official newsletter. The cargo totaled 100,000 metric tons, CNPC said, without elaborating on the crude's origin.
However, China Securities Journal last month reported that PetroChina, which planned to put its Qinzhou refinery into operations on June 29, already had an inventory of one million tons of crude oil from Sudan.
Other reports say Sudan has imported as much as 225,000 b/d of Sudanese crude over the past five months.
PetroChina began test runs at the Qinzhou refinery in late June, and it plans to enter commercial runs around the end of August. Output at the refinery is expected to reach 7 million tonnes a year, including gasoline, gasoil, naphtha, LPG and other petrochemical products.
Last September, Chinese media reported that Qinzhou Port Coastal Industrial Investment Co. Ltd. would be in charge of the construction of a 300,000-ton navigation channel for PetroChina's oil refinery and storage project.
At a total investment of RMB1 billion, the navigation channel – measuring 38 km long, 320 m wide, and 25 m deep – is scheduled to complete by 2011.
US sanctions, issued in 1997, state that “US persons are prohibited from engaging in any transactions or activities related to the petroleum or petrochemical industries in Sudan without authorization from OFAC (Office of Foreign Assets Control).
“This prohibition extends to the entire territory of Sudan, including Southern Sudan. The prohibition also includes facilitation by US persons of such transactions or activities undertaken by non-US persons.”
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posted by: noreply@blogger.com
100714 :US orders PetroChina not to refine Sudanese oil