CNOOC bids for big stake in Nigerian oil

China National Offshore Oil Corp (CNOOC) is in talks with Nigeria to buy large stakes in some of the richest oil blocks in the world, the Financial Times reported on Tuesday.

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

CNOOC, the third largest oil and gas producer and an offshore specialist, is bidding for 6 billion barrels of oil, equivalent to one in six pumped by Africa's second largest oil producer, according to the paper.

Yang Hua, president of CNOOC Ltd, the listed arm that has been the main vehicle for the firm's overseas investment, declined to comment.

CNOOC's spokesman Xiao Zongwei said he had never heard of the development reported in the paper.

If the bid is successful, it could place the company in competition with major western oil groups like Total, Shell, Chevron and Exxon Mobil, which operate the 23 blocks under discussion, the newspaper said.

The report 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.

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 has started pumping oil to reach 175,000 barrels a day this 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 licenses). We love to see this kind of competition."

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.

Source: BizChina