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China eyes Nigeria’s Oil reserves

The Nigerian Government has confirmed that China is pursuing a stake in his country’s oil reserves.”They made a proposal. We are considering the proposal,” Odein Ajumogobia, Nigeria’s minister of state for petroleum, confirmed  last week

“We are going to evaluate the proposal and see how it’s going to benefit us. We are to look at the mutuality of interest that we have and that they have. We are looking at the volume of oil that they want and what reserves are even available.”

China’s state-owned CNOOC Ltd. is trying to buy 6 billion barrels of oil — or a sixth of the proven reserves in Nigeria — a move that could put China in competition with Royal Dutch Shell PLC, Chevron, Total SA and Exxon Mobil Corp.

Those companies control all or parts of the 23 oil blocks sought by China.

The Wall Street Journal reported Wednesday that China has been reeling from setbacks on oil deals in Angola and Libya.

Libya vetoed a $462 million bid by China National Petroleum Corp. for Libya-focused Verenex Energy Inc. on Sept. 8. Days later, Angola’s state-owned Sonangol said it wanted to block the sale of an oil field stake to CNOOC Ltd. and China PetroChemical Corp.

An official with Nigeria’s state oil company told the Journal that he wasn’t sure exactly how much crude CNOOC was vying for, but that targeted investment would run into several billion dollars.

China has successfully pursued some oil deals in Africa by offering to pay for infrastructure projects, the Journal said. But that strategy may backfire in Nigeria.

Chatham House, a U.K. think tank, published a study this year about how such deals generally failed in Nigeria. It concluded that the main reason was the Nigerian government’s lack of “follow-up mechanisms to enforce the deals.”