Chinese Mandarin - China, Nigeria to ink oil deal

CHINA / National

China, Nigeria to ink oil deal
(Reuters)
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 Daukoru.

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.

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