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China Invests $16 Billion in Nigeria's Oil Sector

Chika Oduah

   ENUGU, NIGERIA - Chinese investment in Nigeria's oil and gas industry
   has reached $16 billion, according to Nigeria's state-run oil company.
   While Nigeria's oil industry welcomes China's interest, analysts worry
   about a lack of transparency in the sector and slow development of the
   country's renewable energy market.

   When a top official with China's third-largest national oil company
   paid a visit to Abuja, Nigeria this month, he was recommended by a top
   official of Nigeria's state-run oil company to increase investment in
   Nigeria's petroleum industry.

   Mele Kyari, the managing director of the Nigerian National Petroleum
   Corporation, or NNPC, thanked the China National Offshore Oil Corp., or
   CNOOC, for its continued support of Nigeria's oil and gas sector.
   Chinese investments in the sector have reached $16 billion. Kyari added
   that Nigeria needs partners like China.

   The two countries need each other to reach their oil production
   targets. Africa's largest oil producing nation pumps 2 million barrels
   a day and has a goal of producing 3 million barrels a day by 2023.
   China's domestic oil production has been on a steady decline because of
   natural depletion and other geological challenges. So experts predict
   that up to 80 percent of China's crude oil supply will be imported by
   2030.

   In comes Nigeria.

   CNOOC started doing business in Nigeria in 2005 and is the largest
   Chinese entity investor in Nigeria. With a focus on overseas
   investment, it's also China's largest offshore oil and natural gas
   developer.

   The company's executive vice president, Lu Yan Ji, said during the
   meeting that Nigeria is one of the company's largest investment
   destinations. He also said that CNOOC is producing 800,000 barrels per
   day, but it wants to reach 1.2 million. Ji hopes Nigeria can help with
   that.

   But there's skepticism.

   Nigeria has had a hard time reaching its production targets. There's
   sporadic militancy in the oil-producing region, as young people often
   take violent action to demand more access to the country's oil wealth.
   There's theft happening right at the pipelines. Fires often burn at
   rusted pipes, and oil operations in Nigeria are disrupted several times
   a year.

   Also there's a serious lack of transparency. The NNPC has a long
   history of scandals, with ongoing accusations of corruption.

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