ABUJA, Mar 9 (Reuters) Nigeria signed production sharing contracts on Thursday with Korean National Oil Company (KNOC) on two highly prospective deep-water oil exploration blocks in the Gulf of Guinea.
The contracts, between state companies KNOC and Nigerian National Petroleum Corp (NNPC), were signed during a visit to Nigeria by South Korean President Roh Moo-hyun.
Securing energy supplies for his resource-poor country is a priority of Roh's trip.
Nigerian and Korean officials also signed two memoranda of understanding to enable Korean companies to invest in energy, minerals and transportation in Africa's most populous country.
Nigeria had given KNOC preferential rights on 65 percent of the two blocks last August in return for huge promised investments in Nigerian infrastructure.
The signature bonus for block 323 was 0 million, while for block 321 it was 6 million, NNPC Managing Director Funso Kupolokun told reporters just after the production sharing contracts were signed.
The bonuses, which will be dwarfed by investments in the blocks if oil is discovered, are to be paid immediately.
Korea had promised to build a 1,200-km (745-mile) gas pipeline from the southern delta to the capital Abuja and 2,250 megawatts of power generation in return for the blocks, Nigerian Minister of State for Petroleum Edmund Daukoru said at the time.
Korean conglomerate Daewoo also agreed to build a shipyard to serve the region, a railway line across Nigeria, and to partner Nigeria in an oil tankering venture, Daukoru said.
NIGERIAN STRATEGY The deal is part of a new Nigerian strategy to improve its derelict infrastructure by securing foreign investment in return for promising oil blocks.
Decades of oil extraction, mostly carried out in joint ventures between NNPC and five Western oil majors, have failed to bring benefits to the majority of Nigerians.
The world's eighth largest crude oil exporter has to import fuel as it is unable to meet its own domestic demand, and electricity supplies fall far short of what the country needs.
No further details were immediately available on the content of the production sharing contracts. Kupolokun did not say whether India's ONGC, which had been vying for control of the two blocks, had a stake.
Nigeria auctioned the remaining 25 percent stake in the blocks last August and ONGC emerged as the winner. But the Korean and Indian firms have since given conflicting accounts of their respective stakes.
Nigeria said in February it wanted the two firms to be partners in exploring the two blocks.
ONGC was keen to increase its stake in the blocks after its attempt to buy a major stake in a giant Nigerian oilfield, Akpo, was blocked by the Indian government over concerns about transparency.
U.S. oil majors boycotted the auction in protest at the preferential treatment given to the Koreans, because industry executives said those two blocks had the most prospective geological structures of all 75 areas on offer.
Reuters AD VP0250
The contracts, between state companies KNOC and Nigerian National Petroleum Corp (NNPC), were signed during a visit to Nigeria by South Korean President Roh Moo-hyun.
Securing energy supplies for his resource-poor country is a priority of Roh's trip.
Nigerian and Korean officials also signed two memoranda of understanding to enable Korean companies to invest in energy, minerals and transportation in Africa's most populous country.
Nigeria had given KNOC preferential rights on 65 percent of the two blocks last August in return for huge promised investments in Nigerian infrastructure.
The signature bonus for block 323 was 0 million, while for block 321 it was 6 million, NNPC Managing Director Funso Kupolokun told reporters just after the production sharing contracts were signed.
The bonuses, which will be dwarfed by investments in the blocks if oil is discovered, are to be paid immediately.
Korea had promised to build a 1,200-km (745-mile) gas pipeline from the southern delta to the capital Abuja and 2,250 megawatts of power generation in return for the blocks, Nigerian Minister of State for Petroleum Edmund Daukoru said at the time.
Korean conglomerate Daewoo also agreed to build a shipyard to serve the region, a railway line across Nigeria, and to partner Nigeria in an oil tankering venture, Daukoru said.
NIGERIAN STRATEGY The deal is part of a new Nigerian strategy to improve its derelict infrastructure by securing foreign investment in return for promising oil blocks.
Decades of oil extraction, mostly carried out in joint ventures between NNPC and five Western oil majors, have failed to bring benefits to the majority of Nigerians.
The world's eighth largest crude oil exporter has to import fuel as it is unable to meet its own domestic demand, and electricity supplies fall far short of what the country needs.
No further details were immediately available on the content of the production sharing contracts. Kupolokun did not say whether India's ONGC, which had been vying for control of the two blocks, had a stake.
Nigeria auctioned the remaining 25 percent stake in the blocks last August and ONGC emerged as the winner. But the Korean and Indian firms have since given conflicting accounts of their respective stakes.
Nigeria said in February it wanted the two firms to be partners in exploring the two blocks.
ONGC was keen to increase its stake in the blocks after its attempt to buy a major stake in a giant Nigerian oilfield, Akpo, was blocked by the Indian government over concerns about transparency.
U.S. oil majors boycotted the auction in protest at the preferential treatment given to the Koreans, because industry executives said those two blocks had the most prospective geological structures of all 75 areas on offer.
Reuters AD VP0250
Oneindia Login