A Chinese state-owned oil company is in talks with Nigeria to buy large stakes in some of the world’s richest oil blocs in a deal that would eclipse Beijing’s previous efforts to secure crude overseas.
The attempt could pitch the Chinese into competition with western oil groups, including Shell, Chevron, Total and ExxonMobil, which partly or wholly control and operate the 23 blocks under discussion. Sixteen licences are up for renewal.
Most prominently, CNOOC is hoping to buy 6 billion barrels of oil, equivalent to one in every six barrels of proven reserves in Nigeria. While the overall value of the offer has not been disclosed, some sources suggest that it caps somewhere around the $50 billion mark. Another issue yet to be disclosed is that of how the Nigerian government plans to allocate equity in the oil blocks; some suspect that it may involve forcing western groups to relinquish their stakes. Bring on the fireworks.