After talks with China, Benin eases oil export ban against Niger

A ship carrying a million barrels of crude oil from Niger left Benin's Seme port for China on Sunday, marking temporary relief in a trade row between the African neighbours as well as Beijing's latest gain in mediating disputes on the continent.

The move came after a Chinese delegation, including from state-owned China National Petroleum Corporation (CNPC), held talks with Beninese President Patrice Talon on Wednesday, shortly after his country blocked landlocked Niger from exporting its oil to China through the port.

Observers said the quick resolution pointed to China's economic and diplomatic leverage in both countries and Beijing's growing skills as a mediator, allowing it to protect Chinese investments in volatile environments.

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CNPC has invested US$4.6 billion in Niger's petroleum industry, and its subsidiary PetroChina owns two-thirds of the country's Agadem oilfield. It also bankrolled and built a 2,000km (1,240-mile) pipeline to move oil from the oilfield to Benin's Atlantic port of Seme.

Last month, Niger's military junta signed a US$400 million oil-backed loan with CNPC requiring repayment in crude oil shipments.

Niger has been transporting crude oil to Seme port via the pipeline since April, but Benin's ban has delayed the oil from reaching China.

"Benin has no intention of harming either the interests of the state of Niger or those of our common partners, CNPC," Beninese Energy Minister Samou Seidou Adambi said last week during a briefing attended by CNPC director general Yuan Wenyuan.

China is expected to lead further negotiations in the coming days, with the Chinese delegation calling for a meeting of the Benin-Niger interstate committee to resolve the disputes between the two West African nations, according to Adambi.

The Economic Community of West African States (Ecowas) imposed sanctions after Niger's military seized power last July, prompting Benin to close its border with the country.

In February, Ecowas lifted the sanctions after Niger threatened to leave the trade bloc, and Benin reopened the border with its neighbour.

But Niger refused to open its land border with Benin, accusing it of hosting "bases training terrorists". On May 8, Benin responded by blocking Niger's oil exports.

Paul Nantulya, a China specialist at the National Defence University's Africa Centre for Strategic Studies in Washington, said the deal showed "the power of Chinese mediation in situations like [the Niger-Benin dispute]".

"The Chinese government has developed an appetite as well as a skill for conducting those types of mediations that protect Chinese interests in highly volatile situations," Nantulya said.

Nantulya said it also spoke to the larger issue of China's skilful manoeuvring with military-led juntas in Burkina Faso, Mali, Niger and elsewhere.

"This is because China was very close to the government that was overthrown, and all these high-value assets were built and negotiated during the previous governments," Nantulya said, referring to the administration of ousted Nigerien president Mohamed Bazoum.

"What we see is that China has become very close to the coup administrations. And one would say that if these coup governments were to be overthrown again, we can be sure that China will find its way around the situation and cultivate strong ties with whoever comes in."

Mark Bohlund, credit research analyst at REDD Intelligence, said the pipeline had given China influence over both governments.

"[However] I think the quick resolution primarily reflects that both countries are dependent on the pipeline for government revenue and foreign exchange earnings," Bohlund said.

He said Niger was in a weaker position than Benin despite the Nigerien junta taking a harder line.

Bohlund said the pipeline was the key lever Benin could push for the border opening, which was important not only for the Beninese port and transport sector but also for agricultural and food imports from Niger.

David Shinn, a China-Africa specialist and professor at George Washington University's Elliott School of International Affairs, said the resolution was less a matter of mediation and more a question of China using its considerable economic leverage with both Benin and Niger.

"There may also have been some financial sweeteners," Shinn added.

Shinn said China and CNPC were caught in the middle of an inter-African dispute, which underscored how precarious it was to do business in the Sahel now and would likely to discourage future foreign direct investment in the region.

"Investors want stability and, to the extent possible, certainty. They certainly don't want this kind of a situation," Shinn said.

But Nantulya said the CNPC's relationship with Niger's military junta mirrored the influence the state-owned enterprise had with the rulers in Sudan and South Sudan. The oil giant was part of the consortium that built Sudan's oil infrastructure.

Nantulya noted that China extended diplomatic and financial resources to mediate Sudan and South Sudan's multiple crises.

"Those mediation efforts have been motivated by the perceived need on the part of the Chinese government to protect its oil infrastructure and to ensure that oil continues to flow," he said.

In 2007, China appointed a special representative as part of its efforts to mediate an end to the Darfur war in Sudan. Beijing was also involved in conflict resolution when South Sudan was rattled by civil war after seceding from Sudan in 2011.

"Sudan and South Sudan give us an excellent case test as to what is happening in Niger," Nantulya said.

He said the Niger-Benin dispute spoke to the kind of security issues that China faced in many countries as it tried to consolidate its Belt and Road Initiative.

Citing a report by the Chinese Ministry of State Security, Nantulya noted that Beijing had said that 75 per cent of its high-value belt and road investments are located in "fragile" or politically unstable countries.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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