Nigeria Set To Sign Energy Deals With China - Oil Min
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By Spencer Swartz
OF DOW JONES NEWSWIRES
DOHA (Dow Jones)--Nigeria, Africa's biggest oil producer, is set to sign a number of deals in the weeks ahead with China that will include a refinery and one offshore deepwater oil block, Nigeria's oil minister Edmund Daukoru said Sunday.
"We are doing a mini-bidding conference on May 19 and, thereafter, as soon as we can put the paperwork together we'll sign the deals," Daukoru told Dow Jones Newswires in an interview.
"These deals will include the CNPC," Daukoru said, referring to the state-run China National Petroleum Corp. (CNPC), the country's top oil producer.
Daukoru, who is also president of the Organization Of Petroleum Exporting Countries, said the deals would be signed to hand over majority ownership of the northern Kaduna refinery, one of Nigeria's four state-run refineries, and three onshore oil blocks.
"Two of the onshore blocks are well into the interior of the country," Daukoru said. The offshore block is located in the deepwaters, he added, declining to provide estimates on the value of the deals to be signed.
Daukoru, speaking at a major gathering of oil producing and consuming nations in Qatar, said the Nigerian government was beginning to address the causes of violence and unrest in the impoverished Niger Delta, where nearly all of Nigeria's oil is produced.
"We have held meetings with (Delta) groups and are working both at the federal level and jointly with some states on these issues," he said.
"What we are focused on, and what the president is focused on, is concrete things," he said. "Building schools, hospitals, telecommunications (networks) to improve these people's lives. Things that we can see and touch."
A Nigerian official here said the government could spend a minimum of $2 billion to build infrastructure in the delta, an swamp area the size of England, with a population of around 20 million, most of whom live in abject poverty.
Delta militants, who have attacked several oil facilities over the past five months and kidnapped several foreign oil workers only to release them later unharmed, have so far rejected government overtures to restore peace to the region. The Movement for Emancipation of the Niger Delta, or MEND, has said the government's efforts haven't addressed their biggest demands.
Attacks Drive Up World Oil Prices
The group, whose attacks have shut-in around 500,000 barrels a day of Nigeria's oil output, is demanding a bigger share of Nigeria's oil revenue and the release of two ethnic Ijaw leaders who have been imprisoned for months on treason and money laundering charges.
The group is also calling on Royal Dutch Shell Plc (RDSB.LN), the biggest Western oil company operating in the West African country, to pay $1.5 billion in environmental compensation.
MEND set off a car bomb that killed two people earlier this week at a military base in the southern oil city Port Harcourt, ending weeks of relative calm. The group's previous attacks on oil installations in Nigeria, which provides a light crude oil craved in U.S. and European markets because its higher quality makes it easier to process into gasoline, have helped drive up world oil prices.
Daukoru said about 120,000 barrels a day of Nigeria's crude oil output is expected to be back online "within a matter of days", but that it will take longer to restore the balance of about 380,000 barrels a day. Nigeria typically produces about 2.4 million barrels a day.
"The balance of 380,000 or thereabouts will require an assessment of the extent of the damage and for repairs to be effected," he said. "That's a matter of judgment as to how big the damage was."
Shell, which has been the most impacted by the instability, has said security concerns continue to hamper the restart of up to a fifth of the country's crude output, saying that some 455,000 barrels a day of its production remains shut. Shell chief executive Jeroen van der Veer told reporters here that he had no new information on Shell's operations in Nigeria.
The company said recently that the Forcados terminal and the offshore EA field remain under force majeure, a clause that allows suppliers of crude to halt deliveries to customers without a legal breach of contract.
"It's difficult to judge when Nigeria production might come back," Daukoru told reporters earlier, adding that "as soon as Shell feels comfortable," it will restart the EA field, which has a capacity of 120,000 barrels a day.
-By Spencer Swartz, Dow Jones Newswires; +44 207 842 9357; spencer.swartz@dowjones.com
(END) Dow Jones Newswires
April 23, 2006 04:59 ET (08:59 GMT)
Copyright (c) 2006 Dow Jones & Company, Inc.- - 04 59 AM EDT 04-23-06 |
