02-10-09 China has made a proposal to buy 6 bn barrels of Nigeria's crude oil reserves and Nigeria said it could sell stakes in its joint ventures with Western oil firms to help Beijing do so. Minister of State for Petroleum Odein Ajumogobia said China would not be given all the reserves it was seeking but that Nigerian state oil firm NNPC could sell stakes in joint ventures with existing oil partners if Beijing offered the right price.
"It's true that the Chinese have made a proposal which we are considering. They are asking for 6 bn barrels of oil from our reserves, but I can tell you that we are not going to give them all of that," Ajumogobia told in Abuja.

Western oil firms including Royal Dutch Shell, Chevron and ExxonMobil, operate in Nigeria through joint ventures with NNPC.
Asked if the state firm could sell its stakes to China, Ajumogobia said: "It's an option we are also looking at. Why not? If the offer is very good and very attractive why not? NNPC has the right to do whatever it likes with its own share."

Industry executives say Nigeria is using the spectre of a Chinese bid for its oil as leverage in difficult contract renewal negotiations with its existing Western oil partners. Analysts say the sale of stakes to China by NNPC would likely be challenged by other partners in the ventures and that the prospect of putting a greater proportion of Nigerian oil reserves in foreign hands would face huge political opposition.
Militants in the Niger Delta, where local communities have long demanded a greater share in the oil wealth, have already indicated relations with Chinese investors would be hostile, describing them as "worse than locusts ravaging a farmland."

Chinese state energy firm CNOOC has identified 23 licenses in Nigeria in which it would like to buy stakes. The list includes 16 licenses operated by Shell, Chevron and Exxon which originally expired last November and are currently either in litigation or up for renewal this year.
Chevron and Exxon won a year's extension, meaning their licenses are due to expire this year, while Shell successfully sought a court injunction allowing it to continue to operate while it challenged the expiry, an industry executive said.

NNPC holds 55 % of SPDC, its joint venture with Shell, 60 % of its Chevron Nigeria joint venture, and 60 % of Mobil Producing Nigeria, its joint venture with ExxonMobil. Analysts say CNOOC or other Chinese firms could bid at one of Nigeria's periodic licensing rounds for new blocks but are unlikely to be able to oust Western firms from fields already producing unless they or NNPC agree to a buyout.
Ajumogobia had said no licenses would be offered while renewal negotiations with existing partners were ongoing.