China, Nigeria to ink oil deal
Updated: 2006-04-26 22:07
Nigeria will give China four oil drilling licences in exchange for a
commitment to invest $4 billion in infrastructure in a deal to be signed during
a visit by President Hu Jintao on Wednesday, a Nigerian official said.
Analysts said the deal would be a good fit for the two giants of Asia and
Africa. China, the world's most populous nation, needs more imported oil to fuel
its rapidly growing economy. Nigeria, Africa's most populous nation but also one
of the world's poorest, needs infrastructure to speed development.
The two countries have been in talks for several months about the agreement,
said Tony Chukwueke, adviser to Nigerian Minister of State for Petroleum Edmund
The deal involves China buying a controlling stake in Nigeria's 110,000
barrel-a-day Kaduna oil refinery and building a railroad and power stations.
In exchange, Nigeria will offer first right of refusal to state-run China
National Petroleum Corp. (CNPC) on four oil exploration blocks in a licensing
round due to be held in Nigeria on May 19.
"We are doing a cooperation agreement upstream which integrates the Kaduna
refinery. We may have to sign off on that during the visit," Chukwueke, who is
also head of the Department for Petroleum Resources, told Reuters by telephone.
"They will be part of the bidding round because of that agreement. They have
first right of refusal on four blocks."
Hu is due to arrive in Nigeria later on Wednesday, the latest stop in a world
tour that has also taken him to the United States, Saudi Arabia and Morocco.