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Wed, Jan 11, 2006 - Page 12 News List

CNOOC buys part of oil field in Niger Delta

ACQUISITION The firm announced the purchase of a 45 percent stake in an oil field in Nigeria, and will use its own cash reserves to fund the deal


Chinese state-controlled oil company CNOOC Ltd (中國海洋石油) said it is paying US$2.3 billion for a 45 percent stake in a Nigerian oil field -- its first major investment since last year's failed bid to take over Unocal Corp.

The deal adds to a multibillion-dollar string of foreign acquisitions by Chinese oil companies, which are aggressively pursuing energy supplies to fuel the country's booming economy.

The agreement, which needs approval from the Nigerian and Chinese governments, covers part of the oil-rich Niger Delta region, CNOOC said.

The company said the area includes the Akpo oil field discovered in 2000, and three other "significant discoveries."

India turns away

Another contender for the field was India's biggest oil company, state-owned Oil & Natural Gas Corp, which submitted a winning US$2 billion bid last month. But India's Cabinet blocked the deal, saying that it wasn't commercially viable.

The Nigeria deal serves CNOOC's desire to grow "through the exploration and development of offshore fields and achieving geographic diversification of the company's portfolio," company chairman Fu Chengyu (傅成玉) said in a written statement.

Hong Kong-based CNOOC said it would pay for the deal from its own cash reserves.

The firm didn't say if oil from the Nigerian field would be exported to China or sold elsewhere.

Scottish consulting firm Wood Mackenzie has estimated Akpo's recoverable oil reserves at 620 million barrels and natural gas at 75 billion cubic meters, the Asian Wall Street Journal said.

Growing demand

China imports more than 40 percent of its estimated daily consumption of 6 million barrels of oil -- a proportion expected to grow amid surging economic growth.

China first became a net oil importer in the 1990s after meeting its own needs for decades. It is now among the world's top foreign oil consumers.

CNOOC last year offered US$18.5 billion for Los Angeles-based Unocal, but withdrew its bid in August after opposition from US politicians.

The Chinese government's China National Offshore Oil Corp owns 70 percent of CNOOC's shares.

Despite government ties, Fu has previously insisted that CNOOC's decisions are motivated by commercial considerations, not official policy.

In China's biggest foreign deal to date, its leading state-owned oil company, China National Petroleum Corp (中國石油天然氣), agreed last year to pay US$4.2 billion for a producer in neighboring Kazakhstan.

Chinese oil firms also have signed exploration or production deals in Sudan, Venezuela and elsewhere.

Last month, CNPC and India's ONGC agreed to jointly acquire oil production rights in Syria.

Visiting Bolivian President-elect Evo Morales on Sunday invited China's state energy firms to help develop his country's vast gas reserves.

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