China seals $2.3bn Nigeria oil deal

China's state-controlled oil company, CNOOC Ltd., has said it is paying $2.3 billion for a 45% stake in a Nigerian oil field - its first major investment since last year's failed bid to take over Unocal Corp.

    China is among the world's top oil consumers

    The deal adds to a multi-billion-dollar string of foreign acquisitions by Chinese oil companies, which are aggressively pursuing energy supplies to fuel the country's booming economy.


    The agreement, which needs approval from the Nigerian and Chinese governments, covers part of the oil-rich Niger Delta region, CNOOC said on Tuesday. It said the area includes the Akpo oil field discovered in 2000, and three other "significant discoveries."


    Another contender for the field was India's biggest oil company, state-owned Oil and Natural Gas Corporation, ONGC, which submitted a winning $2 billion bid last month. But the Indian government blocked the deal, saying it wasn't commercially viable.


    The Nigeria deal serves CNOOC's desire to grow "through the exploration and development of offshore fields and achieving geographic diversification of the company's portfolio," Fu Chengyu, the company chairman, said in a written statement.


    Hong Kong-based CNOOC said it would pay for the deal from its own cash reserves. It didn't say if oil from the Nigerian field would be exported to China or sold elsewhere.


    Scottish consulting firm Wood Mackenzie has estimated Akpo's recoverable oil reserves at 620 million barrels and natural gas at 75 billion cubic meters, The Asian Wall Street Journal said.


    Unocal bid foiled


    China imports over 40% of its daily
    oil needs

    China imports more than 40% of its estimated daily consumption of 6 million barrels of oil - a proportion expected to grow amid surging economic growth.


    China first became a net oil importer in the 1990s after meeting its own needs for decades. It is now among the world's top foreign oil consumers.


    CNOOC last year offered $18.5 billion for Los Angeles-based Unocal, but withdrew its bid in August after opposition from US politicians.


    The Chinese government's China National Offshore Oil Corp. owns 70% of CNOOC's shares.


    Despite government ties, Fu had previously insisted that CNOOC's decisions were motivated by commercial considerations, not official policy.


    In China's biggest foreign deal to date, its leading state-owned oil company, China National Petroleum Corporation agreed last year to pay $4.2 billion for a producer in neighbouring Kazakhstan.


    Chinese oil firms also have signed exploration or production deals in Sudan, Venezuela and elsewhere.


    Last month, CNPC and India's ONGC agreed to jointly acquire oil production rights in Syria.


    Visiting Bolivian President-elect Evo Morales on Sunday invited China's state energy firms to help develop his country's vast gas reserves.

    SOURCE: Agencies


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