S.Sudan oil row with Khartoum hurting China ties

JUBA (Reuters) - South Sudan on Wednesday said its relations with China are being strained by accusations that Chinese oil firms may have cooperated with Sudan in seizing a portion of its oil in a row over transit payments.

South Sudan took three-quarters of Sudan's oil when it became independent in July under a peace deal with Khartoum that ended decades of civil war.

The landlocked nation needs to export its crude through Sudanese pipelines and the Red Sea port of Port Sudan but both sides have failed to agree on a transit fee.

Last month South Sudan shut down its entire oil production of 350,000 barrels a day after Khartoum started seizing some of its oil in lieu of fees it says are unpaid. Juba accuses Khartoum of seizing 6 million barrels since December.

Juba's top negotiator Pagan Amum accused unspecified Chinese firms of having played a role in helping Khartoum to seize its oil.

"Our relations with China are beginning but they are of course having difficulties now because of the role of some Chinese companies or individuals covering up some of this stealing," he told reporters in Juba.

State oil firms from China, India and Malaysia own majority shares in the three consortiums extracting oil in South Sudan. China is the biggest buyer of South Sudanese oil and has built the most oil facilities in both countries.

Amum said oil firms operating in Unity state had helped to block export of the entire output in December and in January.

"We will make them pay the cost or else they are out of the country," he said, without naming the firms.

Amum also said the Sudanese oil ministry had ordered Malaysian-Chinese pipeline operator Petrodar this week to switch on a tie-in pipeline to divert 120,000 bpd of southern oil to Sudan's refineries.

He handed out a letter dated February 13, allegedly from Petrodar, informing South Sudan that Sudan had commissioned the tie-in line to transfer crude "unilaterally and by force."

There was no immediate response from China or Sudan.

Oil talks sponsored by the African Union in Ethiopia will resume on February 23, Amum said, dashing hopes of a quick deal.

"They are stealing and robbing our oil," he said.

Juba will not sign any deal with Sudan without guarantees by China, India and Malaysia that no more oil seizures by Sudan will be possible in the future, he said.

South Sudan wants Khartoum to release all vessels held at Port Sudan and repay the value of the seized oil, he added.