September 29, 2009 / 3:03 AM / 9 years ago

CORRECTED - UPDATE 3-China CNOOC silent on report of Nigeria oil talks

* CNOOC bidding for 6 bln barrels of oil - FT

* Deal could be worth around $30 bln - FT

* CNOOC Ltd shares rise; president declines comment

(In third paragraph, corrects to say one sixth of proven oil reserves, not one sixth of oil pumped)

(Adds analyst comment, changes story tag to NIGERIA-OIL)

LONDON/BEIJING, Sept 29 (Reuters) - Chinese state-owned oil company CNOOC is in talks with Nigeria to buy large stakes in some of Africa’s richest oil blocks, the Financial Times reported on Tuesday.

The value of the potential deal was not disclosed, but some details suggested a figure of around $30 billion, the FT said.

It said CNOOC, China’s No.3 oil and gas producer and an offshore specialist, was bidding for 6 billion barrels of oil, equivalent to one sixth of the proven oil reserves in Nigeria, which vies with Angola to be Africa’s largest oil producer.

Yang Hua, president of CNOOC Ltd (0883.HK) (CEO.N) the listed arm that has been the main vehicle for the firm’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 oil firm NNPC.

Shares in CNOOC Ltd rose 2.7 percent in Hong Kong, slightly exceeding a rise in the benchmark Hang Seng index .HSI.

If the bid is successful, it could place the company in competition with major western oil groups like Total (TOTF.PA), Royal Dutch Shell (RDSa.L), Chevron (CVX.N) and Exxon Mobil (XOM.N), 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 (IOCs) have been difficult, first over funding of joint ventures, over arrears, reviewing the terms of production sharing contracts (PSCs),” said Antony Goldman, head of London-based PM Consulting and a Nigeria expert.

“Some of these licences have come up for renewal and the government feels they are worth more than the IOCs 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 deepsea oil 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, No.2 oil firm Sinopec Group paid $7.24 billion for Swiss oil and gas firm Addax, which operates in Nigeria and other African states. (Reporting by Nick Tattersall in Lagos, Randy Fabi in Abuja, Jan Harvey in London, Chen Aizhu in Beijing and Sui-Lee Wee in Hong Kong; Editing by Lincoln Feast and Anthony Barker)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below