CNOOC to increase investment in Nigeria

CNOOC Ltd, whose controlling shareholder is China National Offshore Oil Corp, the country's largest offshore oil and natural gas developer, said the company will increase investment in its existing oil and gas operation in Nigeria, which it described as one of its most strategic and important overseas business undertakings.

The Beijing-based oil company has been investing in Nigeria for more than 10 years, and is currently the largest Chinese entity investor in Nigeria, it said.

Nigeria has been holding talks with oil majors on new financial agreements for joint ventures since 2017. The State-owned oil company signed financing agreements with Chevron and Shell worth at least $780 million last year to boost crude oil production and reserves.

Other Western oil companies, including ExxonMobil, operate in Nigeria through joint ventures with the Nigerian National Petroleum Corp.

According to CNOOC, Africa is a relatively large oil and gas reserve and production base for the company, with most of the firm's assets in Nigeria and Uganda.

Reserves and daily production volume in Africa reached 136.9 million barrels of oil equivalent and 73,625 BOE per day respectively by the end of last year, representing around 2.8 percent of the company's total reserves and 5.7 percent of its daily production.

The company has a 45 percent stake in the OML130 block in Nigeria, a deepwater project comprising four oilfields - Akpo, Egina, Egina South and Preowei. The Akpo oilfield maintained stable production last year, with net output reaching approximately 56,000 barrels per day, while the Egina project is in the engineering construction stage.

The company also owns one-third interest in each of EA 1, EA 2 and EA 3A in Uganda, which are located at the Lake Albert Basin, one of the most promising basins for oil and gas resources in Africa.

Apart from Nigeria and Uganda, the company owns interests in several blocks in the Republic of the Congo, Algeria and Gabon. In 2017, the company also obtained a 65 percent operating interest in the AGC Profond block in offshore Senegal and Guinea-Bissau.

After some two decades of development, China has witnessed steady cooperation with Africa in the fields of oil and gas. Africa has become the second-largest crude oil import destination for China so far with proved reserves seeing a rapid increase.

Asia's biggest oil refiner China Petrochemical Corp, known as Sinopec, has also announced that it has signed an agreement to acquire a refinery and key assets of Chevron South Africa and Chevron Botswana for about $900 million, which will be Sinopec's first refinery on the African continent.

Li Li, energy research director at ICIS China, a consulting company that provides analysis of China's energy market, said it is in accordance with Chinese oil companies becoming more active in chasing refinery assets worldwide as oil majors reshape asset portfolios.

Africa, with increasing proved reserves and yields, has become a major destination for the country's oil and gas companies to expand their overseas footprints, said Zeng Xingqiu, deputy head of energy research at the Investment Association of China.

Despite smaller investment made by Chinese companies compared with countries and regions in Europe and Asia, China is seeing steadily increasing investment in the region and the outlook is positive, he said.