Nigeria, China suspend talks over $50b oil bid

By Editor   |   11 May 2010   |   2:31 pm  
CHINA’s bid for Nigeria’s six billion barrels of oil from the reserve blocks may have been consigned to the shelves, as talks over the interest have been stalled, over alleged dispute on bid offer.

China, last year, offered to invest as much as $50 billion to acquire a large stake in Nigeria’s oil sector, a bid which included incursions into some oil blocks held by Royal Dutch Shell, ExxonMobil and Chevron.

“We have not had any discussions with China for several months,” Emmanuel Egbogah, Presidential Adviser on Energy, told Reuters in Abuja yesterday.

“We have made our position clear. We told them we want a fair market value for our oil.”

Egbogah declined to specify how much Nigeria was seeking for its oil, which usually sells at a premium in the physical crude markets because it can be more easily refined into fuel products than Middle Eastern grades.

He however reiterated that China was unlikely to be given all the reserves it wanted.

The last reported talks between the two countries occurred when Chinese Foreign Minister, Yang Jiechi’s visited Nigeria in January.

Egbogah said Nigeria remained open to talks with China, but no date had been set for another round of negotiations.

Industry executives were of the opinion that Nigeria could be using the possibility of a Chinese bid for its oil as leverage in difficult contract renewal negotiations with its existing Western oil partners.

Exxon is the only one so far to obtain a renewal for its three shallow water oil licences, which currently produce around 580,000 barrels per day, for a further 20 years.

But that agreement appeared shaky as it has not been formally signed off on by the petroleum resources minister.

Egbogah declined to comment on the oil chief’s position, while Exxon decline to disclose details of its business discussions, over the issue.

Egbogah also said the government was yet to approve Shell’s sale of three Nigerian oil licences to a consortium, consisting of two local firms and France’s Maurel & Prom.

Shell, in January, agreed to sell oil mining leases 4, 38, 41 located in the Northwestern part of the Niger Delta. The leases include 30 wells with a production capacity of around 50,000 barrels of oil equivalent per day.

“Shell must present this request of divestment to the government. We have not received that yet,” Egbogah said.



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