China keen to acquire $30-billion oil stake in Nigeria: FT
29 Sep 2009
China's state-owned oil company, China National Offshore Oil Corporation (CNOOC) is in talks with Nigeria to acquire a 49-per cent stake in 23 prime oil blocks estimated to hold 6 billion barrels of oil for around $30 billion, the Financial Times reported today.
According to some oil executives, the CNOOC offer could go upto $50 billion, and potentially eclipse the $25 billion oil for loan deal China signed with Russia in February (See: China, Russia sign $25-billion loan-for-oil deal) and also be China's largest ever investment in the oil sector overseas.
The London-based paper said that China's third largest oil company is trying to acquire a 49-per cent stake in 23 prime oil blocks, and if its bid is successful, it could put the Chinese oil major in competition with Royal Dutch Shell, Chevron, Total and Exxon Mobil, which partly or wholly control and operate these blocks.
Although 16 licenses are up for renewal from the 23 blocks, the leases for 2 blocks expire only in 2019. Nigeria's state run oil company has a production-sharing contract in 5 blocks with foreign oil companies until 2020.
How Nigeria plans to sell stakes in these blocks to China without the raising the ire of these western oil companies or potential litigation is said to be perplexing industry analysts, though it is currently in the process of overhauling its energy sector and a bill for restructuring Nigeria's oil industry is currently before the national assembly.
Financial Times said it had access to details of CNOOC's talks with Nigeria contained in a letter from the office of Nigeria's President Umaru Yar'Adua to CNOOC's representative in Nigeria.
