Nigerian energy company Oando has signed an agreement with RussiaÔÇÖs state-controlled gas group Gazprom to collaborate in oil and gas projects in the African country.
The two companies have joined forces to develop projects in NigeriaÔÇÖs oil and gas sector, as well as working on hydrocarbon assets and infrastructure in the Gulf of Guinea and across West Africa.
The work will include building the infrastructure and pipelines for the distribution of gas in Nigeria.
Although neither firm has revealed how much they might spend as part of the deal, they have both recently committed billions of dollars to developing the regionÔÇÖs untapped energy potential.
Nigeria has AfricaÔÇÖs biggest hydrocarbon reserves, totalling about 36 billion barrels of crude oil and 187 trillion cubic feet of gas. Its oil potential has long been exploited but until now its gas reservesÔÇöthe seventh largest in the worldÔÇöremain largely undeveloped.
Nigeria has now begun looking to foreign oil companies to help rebuild its gas infrastructure, which was constructed in the late 1970s but has been poorly maintained.
Oando and Gazprom were among 15 energy companies selected by the Government in March this year as potential investors to help develop gas projects in the country.
In June, Gazprom teamed up with the Nigerian National Petroleum Corporation to form Nigaz, a 50-50 joint venture that would explore and develop natural gas resources with a combined investment of $2.5 billion.
The Russian company has also been keen to play a part in the construction of a $10 billion (Ôé¼6.7 billion) gas pipeline that would run from Nigeria, across the Sahara, to Europe.
Lagos-based Oando has begun diversifying from simply importing and marketing refined fuel products into producing, refining and transporting oil and gas.
Earlier this month, it won a contract worth $1 billion (Ôé¼670 million) to tap gas from GhanaÔÇÖs Jubilee oilfield.
The company is currently in the process of raising NGN200 billion (Ôé¼884 million) to fund acquisitions and expansion.
The major players in NigeriaÔÇÖs petroleum sector are currently Royal Dutch Shell, EuropeÔÇÖs Total, and Texas, US-based ExxonMobil and Chevron. However, the Nigerian government has recently begun to welcome new foreign investment from companies including Gazprom and ChinaÔÇÖs CNOOC.
Oando is NigeriaÔÇÖs largest fuel retailer and gas distributor.
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