Foreign Correspondence

[Amaunet]

China to invest $5000 million in Nigeria oil sector

Every step Bush takes, China is there. As the United States depends heavily on Nigerian sweet crude and China plans to increase their influence in Nigeria we will have to wait and see if in the future China is able to cut deeply into our share. -Am

China to Invest $.5Bn in Upstream Sector


This Day (Lagos)

May 21, 2004
Posted to the web May 21, 2004

Onyebuchi Ezigbo
Abuja

The Chinese Government has said it would commit more than $500 million in the upstream sector of the country's oil industry.

Also, China would want to invest in the downstream sector, telecommunications, automobile assembly plants, manufacturing and help train Nigerian oil workers.

The country's Vice Minister of Commerce and leader of a 10-member trade delegation to Nigeria, Mr. Wei Jianguo disclosed this yesterday in Abuja during two separate courtesy calls to the Special Adviser to the President on Petroleum and Energy, Dr. Edmund Daukoru and Group Managing Director of the Nigerian national Petroleum Corporation (NNPC), Engr. Funsho Kupolokun.

Jianguo said the amount would be spent on the two deep offshore oil blocks (OML 64 and 66) whose formal approval was conveyed by President Olusegun Obasanjo at a recent meeting with the delegation.

The Chinese Oil company - SINOPEC was awarded the contract to operate the two oil fields under a Joint Venture agreement with Nigerian Petroleum Development Company (NPDC), an NNPC subsidiary.

The Chinese minister said his country is happy with the agreement it had with the corporation to supply China 50,000 barrels of crude oil daily and would want to expand the volume in future. He added that China's oil import this year would exceed 100 million tons.

The leader of the delegation told Kupolokun that his country was interested in establishing a strategic long-term partnership with NNPC and NPDC as well as other local oil firms in developing the oil industry to attain world class standard.

He said China was very impressed by the great progress recorded by Nigeria in the oil and gas sectors.

"We are also glad to hear that President Olusegun Obasanjo has approved the award of two oil blocks, OML 64 and 66 to SINOPEC and that the Chinese company Will operate the top creek marginal field," Jianguo said.

He said the Chinese government is prepared to assist NNPC and other local firms in training their workers in China to acquire new technologies and expertise so that their operations can meet international standard.

The proposed training courses are expected to last between two to five years, he explained.

He further said his country would want to partake in the development of local refining capabilities and would be bidding for local refineries now in the process of being privatised. In order to achieve the desired long-term partnership, Jiangou called for establishment of a mechanism to facilitate the necessary trade agreements. The main task of the mechanism, he said, would be to have active discussion regarding the long-term co-operation, to help co-ordinate the technology and skill acquisition programmes, and to explore other areas where the two countries can partner in the execution of development projects. In his response, Kupolokun said the corporation also expects co-operation between the two countries in the gas and downstream sectors where "NNPC's monopoly is presently giving way and we are looking forward to private sector participation". He also formally invited the Chinese delegation to take interest in the local refining and distribution of petroleum products. Daukoru said it is noteworthy that China had been involved in several partnership projects with Nigeria in the past such as the oil production projects and railway as well as other sectors of the economy. These past co-operative efforts, he said, show that China is not only interested in making quick money but actually has long-term investment plans. He urged the delegation to take opportunity of the forthcoming licensing rounds of more Marginal fields which will come up within the first half of 2005 and further expand their investment profile in Nigeria.



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