China seeks major stake in Nigerian oil

September 29, 2009 12:28:09 PM

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A Chinese state-owned oil company is in talks with Nigeria to acquire stakes in some of the world's richest oil blocks, in potentially one of Beijing's biggest overseas oil deals, a daily said Tuesday.

China's largest listed offshore oil and gas producer CNOOC is seeking to buy six billion barrels of oil, the equivalent to one in every six barrels of the proven reserves in Nigeria, the Financial Times said.

The bids could pitch China into competition with western oil groups including Shell, Chevron, Total and ExxonMobil which partially or wholly control and operate the 23 blocks under discussion.

Sixteen licences are up for renewal, according to the FT.

Details of the talks are contained in a letter from the office of Nigeria's President Umaru Yar’Adua to Sunrise, CNOOC's representative, a copy of which was obtained by the FT.

The overall value of the Chinese offer is not disclosed, although some details suggest a figure of about 30 billion dollars (20 billion euros).

"Negotiations are ongoing not only with Sunrise/CNOOC but also with all other stakeholders in the industry," a spokesman for Yar’Adua said.

"The federal government has not taken any final position on the issue."

The letter, dated August 13, said an initial offer was "unacceptable" but added: "Your interest in all the listed blocks will be considered if your revised offer is favourable."

China's government-backed oil companies are seizing on the economic crisis to make landmark overseas acquisitions, in a bid to feed the country's growing economy.