Alistair Dawber: Where China leads, other nations are desperate to follow

Thursday 30 September 2010 19:00 EDT
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Kelly Rissman

US News Reporter

In just 10 years the flat skyline of Sudan's dusty capital has been transformed as the former British colony has attracted billions of dollars of Chinese investment in return for access to its vast reserves of natural resources. Today, visiting executives can even enjoy the luxury of Khartoum's very own Burj Al-Fateh hotel, a skyscraper in the shape of a ship's sail, that was built with Gulf money and would not look out of place in brash Dubai.

Sudan may be war-ravaged, corrupt and at one time a haven for Osama bin Laden, yet the statistics pointing to its potential are mouth-watering. The country is thought to have some of the biggest untapped reserves of oil in the world. It produced 39.3 million barrels in the first half of the year, an increase of 74.8 per cent on the same period last year, the Petroleum Department of the Southern government said earlier this week. Analysts estimate that the country is capable of churning out 1 million barrels a day.

About 70 per cent of the oil reserves are in the South, which has benefited from greater autonomy since a peace deal was signed with the Khartoum government in 2005. Shell and BP both say they have no operations in Sudan, and no plans to invest in the country, but neither are ruling out the possibility in the future.

But even since the agreement between the largely Christian South and the Muslim North, rows over who has rights over the oil fields have continued.

White Nile, a small UK oil exploration firm run by the former England test cricketer Phil Edmonds, withdrew from Sudan two years ago when a licence for which it had paid the Southern administration as much as $50m to secure was revoked after Khartoum sold the same interest to the French energy giant Total.

And even if Sudan manages to lure the cream of British industry, businesses are already years behind the competition. China is already the country's biggest trading partner. It has secured its position by funding key infrastructure projects, including a bridge spanning the Nile in Khartoum which replaced the dilapidated structure left by the British.

A number of emerging market countries are getting in on the act too. As recently as Monday, Sudan signed deals worth $500m (£320m) with Brazil's President Lula, covering everything from infrastructure projects to sugar.

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