The Chinese aren't messing around with sourcing future commodities.
CNOOC tight-lipped over Nigeria talk
News wires
China National Offshore Corporation (CNOOC) has refused to comment on reports it is in talks with Nigeria to buy large stakes in some of Africa's richest oil blocks.
The value of the potential deal was not disclosed, but some details suggested a figure of around $30 billion, a report in this morning's edition of the Financial Times said.
The FT report said CNOOC was bidding for 6 billion barrels of oil, equivalent to one-sixth of Nigeria's reserves.
Yang Hua, president of CNOOC Ltd the listed arm that has been the main vehicle for the company's overseas investment, declined to comment.
"You know my standard answer - no comment," Yang told Reuters when asked if he was aware of the FT report.
CNOOC's spokesman Xiao Zongwei said he had never heard of the development reported in the paper.
The FT said the deal was detailed in a letter it had seen from the office of Nigeria's president, Umaru Yar'Adua, to CNOOC's representative, Sunrise.
There was no immediate comment from the Nigerian presidency or from Nigerian state player the Nigeria National Petroleum Corporation (NNPC).
Meanwhile, a senior industry source told Reuters several of the Nigerian oil licences being eyed by CNOOC are either close to expiry or under litigation.
The source said most of the licences operated by Shell, Chevron and ExxonMobil had originally expired last November and December.
Chevron and ExxonMobil won a year's extension to the rights, meaning their licences are due to expire later this year, while Shell successfully sought a court injunction allowing it to continue to operate its blocks while it challenged the expiry, the source said.
Shares in CNOOC Ltd rose 2.7% in Hong Kong, slightly exceeding a rise in the benchmark Hang Seng index.
If the bid is successful, it could place the company in competition with major western groups including Total, Shell, Chevron and ExxonMobil, which operate the 23 blocks under discussion, the newspaper said.
"The industry is aware locally that there is an interest from Chinese national oil companies to acquire oil blocks in Nigeria," an oil industry source said.
"It is not a secret. The quantity cited by the FT is however surprising."
Analysts said the leak appeared to be an effort to put pressure on long-standing Western oil partners in Nigeria at a time when relations with the industry are strained.
"For some time relations between the government and the international oil companies have been difficult, first over funding of joint ventures, over arrears, reviewing the terms of production sharing contracts (PSCs)," Antony Goldman, head of London-based PM Consulting and a Nigeria expert, told Reuters.
"Some of these licences have come up for renewal and the government feels they are worth more than the international oil companies are prepared to pay to renew them," he told Reuters.
So far the largest investment CNOOC has made in Nigeria was a $2.69 billion stake purchased in 2006 in deep-water block OML-130, which operator Total said in March had started pumping oil to reach 175,000 barrels per day output during the summer.
Tanimu Yakubu, the Nigerian president's economic adviser, said in the FT report that China may not secure "anything close" to the 6 billion barrels it is seeking, saying: "We want to retain our traditional friends."
He added, however, that the Chinese "are really offering multiples of what existing producers are pledging (for licences). We love to see this kind of competition."
Peter Hitchens at Panmure Gordon & Co also said the reserves that could change hands would be smaller than 6 billion barrels.
"Although we believe that this deal is unlikely and that the actual reserves sold could well be smaller, it highlights the desire of Chinese oil companies to secure significant reserves in Africa," Hitchens said in a note.
In a recent Chinese acquisition of Nigerian oil assets, Sinopec paid $7.24 billion for Swiss.based Addax Petroleum, which operates in Nigeria and other African states.
Tuesday, 29 September, 2009, 10:17 GMT |
