China is seeking to greatly expand its African oil reserves by bidding for a sixth of Nigeria's crude reserves, according to a report in the Financial Times (FT).
Chinese state-controlled China National Offshore Oil Corp (CNOOC) is in talks to acquire concessions in 23 prime blocks in Nigeria that would double ChinaÔÇÖs oil reserves in Africa. Sixteen licences are up for renewal, according to the paper.
CNOOC, ChinaÔÇÖs number three oil and gas producer is bidding for around 6 billion barrels of oilÔÇöthe equivalent of one sixth of NigeriaÔÇÖs crude reserves. The value of the potential deal has not been disclosed but details suggest it could be up to $30 billion, the FT said.
If CNOOCÔÇÖs bid were to be successful, it would place the company among the ranks of firms such as Total, Chevron, ExxonMobil and Shell, who all partially or wholly control and operate the 23 blocks China is bidding for a stake in.
Around 83 per cent of CNOOCÔÇÖs reserves are currently off ChinaÔÇÖs coast. It also has interests in Australia, Indonesia and Africa.
The companyÔÇÖs largest investment in Nigeria so far has been its $2.69 billion stake in deepsea oil block OML-130, which it purchased in 2006. Operated by Total, the block has now started pumping oil at a rate of 175,000 barrels per day.
ChinaÔÇÖs state-owned oil firms are keen to acquire overseas oil assets in order to meet the demands of the countryÔÇÖs rapidly growing economy. ChinaÔÇÖs consumption of oil has doubled in the last decade, rising to eight million barrels a day last year.
ChinaÔÇÖs number two oil firm Sinopec recently paid $7.24 billion for Swiss oil and gas company Addax, which has a strong presence in Nigeria and other African countries.
Neither CNOOC nor the Nigerian government have yet confirmed that any discussions are underway.
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