China’s state owned companies: CNOOC and Sinopec, have focused largely on buying producing assets, rather than participating in bid rounds in Nigeria.
The take- over of TOTAL’s 20% stake in OML 138, helps China Inc. to entrench itself as a major producer of hydrocarbon liquids in Africa’s largest oil producing jurisdiction.
With the 28,000BOPD added by the latest transaction, China’s net production in the country becomes 181,000BOPD, trailing only that of Shell, ExxonMobil, Chevron and TOTAL. The Chinese government is a bigger producer in Nigeria than ENI, the Italian major. This is how it happened:
- In 2006, China National Overseas Offshore Corporation (CNOOC) launched itself into the country by paying $2.268 billion for 45% of the SAPETRO held, TOTAL operated Oil Mining Lease (OML) 130, which contains the 750 million barrel condensate field, Akpo.
- In 2008, Sinopec took over technical operatorship of NPDC’s OMLs 64 and 66. In March 2009, four years after the Asian operator signed a joint venture agreement with NPDC, a significant discovery was made on OML 64: a 150 feet of pay in four reservoirs in Kakaku 1, with the rig Lonestar 2005. There’s no production yet.
- In August 2009, China Petroleum & Chemical Corporation (Sinopec) paid $7 billion to take over Addax Petroleum, the largest and fastest growing international independent in Nigeria and the Gulf of Guinea.
- In between these deals, Sinopec took advantage of the Nigerian marginal field programme by acquiring 40% in (local company)Universal Energy’s Stubb Creek, a 15 million barrel field, located in the Eastern Niger Delta. The marginal field programme is designed to allow Nigeria’s homegrown independents to become producers of small fields. As of November 22, 2012, Sinopec still hadn’t brought Stubb Creek on production. Why should it worry? There are bigger fishes, including Usan, to fry.
- CNOOC bought 38% of Emerald operated Oil Prospecting Lease OPL 229. There is an oil discovery on the lease, but the partners don’t seem to be in a hurry.