By Tom Burgis, FT West Africa correspondent, in Lagos
The talks between a Chinese oil company and Nigeria about wresting some prime oil blocks sitting on 6bn barrels of crude from western energy groups raise some intriguing questions – even if officials warn that the deal is by no means sealed.
Firstly, the price. Oil men in Lagos talk of the Chinese putting $50bn on the table.
Secondly, how would the deal be structured? China has struck some huge bargains – in places such as Angola and the Democratic Republic of Congo – to provide sorely needed infrastructure in return for the commodities on which its fast-industrialising economy runs.
But previous efforts to reach such agreements in Nigeria have ended in acrimony and Chinese oil groups appeared to have switched tack to buying stakes in listed producers such as Addax.
A third conundrum is how the Nigerian government could sell stakes in the two of the 23 blocks under discussion whose leases run until 2019. Similarly, the production-sharing contracts that cover the five offshore blocks end only in 2020. These, though, are meant to be restructured, in any case, under a bill designed to overhaul the Nigerian energy sector that is before the national assembly. Read more