From: wolda002@umn.edu
Date: Wed Sep 30 2009 - 00:23:43 EDT
China seeks a sixth of Nigeria's oil reserves
China is seeking to massively expand its African oil reserves by bidding
for up to a sixth of Nigeria's crude reserves, according to a leaked letter
from the office of the President of Nigeria.
By Peter Foster
Published: 6:18AM BST 29 Sep 2009
The move by CNOOC, the Chinese state-controlled oil giant, to acquire
concessions in 23 prime blocks could create conflict with western oil
groups including Shell, Chevron, Total and ExxonMobil who already own
stakes in the blocks.
If all CNOOC’s bids were accepted they would double China’s oil
reserves in Africa where China has sealed a number of successful
oil-for-infrastructure deals in recent years in countries like Angola and
the Democratic Republic of Congo.
The letter, dated August 13 and published by the Financial Times newspaper
detailed talks between CNOOC’s representative in Nigeria, Sunrise, and
the office of Nigeria's President Umaru Yar'Adua.
While rejecting CNOOC’s initial offer – rumoured to be between
$30bn-$50bn (£18bn-£31.4bn) and it added: “Your interest in all the
listed blocks will be considered if your revised offer is favourable.”
It remains unclear from the letter whether the 49pc stakes CNOOC is seeking
would come from the holdings of western oil major or their joint-venture
partner, Nigeria’s state owned oil company.
A spokesman for President Yar'Adua confirmed that negotiations with
Sunrise/CNOOC and “all other” industry stakeholders were ongoing,
adding that “the federal government has not taken any final position on
the issue.”
A cash-rich China has used the global financial crisis as an opportunity
for a strategic expansion in oil and other commodities that it needs to
fuel its rapidly expanding economy.
Nigeria’s parliament is currently debating a bill to restructure the
country’s energy sector which is riddled with corruption and in desperate
need of investment.
However any deal between Nigeria and China would have to overcome a number
of political hurdles following a number of failed oil-for-infrastructure
deals with the previous administration which became mired in damaging
corruption allegations.
Those difficulties have led some analysts to speculate that the Nigerian
authorities might be using the Chinese offer to extract more favourable
terms from western companies already holding concessions.
China’s popular image in Nigeria was damaged by recent reports that China
had requested permission to cremate 30 Nigerians who had died in Chinese
jails after being arrested on fraud, immigration or drugs offences.
A committee of Nigerian MPs responded by calling on Nigeria’s government
for a tit-for-tat investigation into the immigration status of the 20,000
Chinese estimated to be resident in Nigeria.
Abike Dabiri-Erewa, the head of the House of Representatives Committee on
the Diaspora, told a press conference that Nigeria could no longer accept a
situation where its people were being "maltreated and dehumanised abroad