CNOOC secures US$1.6bn for Nigeria project

HONG KONG, June 2 — China’s top offshore oil and gas producer, CNOOC Ltd, said on Friday it had signed for a RMB12.8 billion (US$1.6 billion) loan with a mainland bank to help finance a project in Nigeria, reports Reuters.

State-controlled CNOOC said its unit had agreed the loan with the Export and Import Bank of China (China EXIM Bank). The loan has a tenor of 10 years and the interest rate is fixed at 4.05%.

Proceeds would be used to fund its ongoing capital needs in Nigeria and to meet the general capital expenditure requirements of other projects, the company said.

CNOOC announced its biggest-ever US$2.7 billion overseas acquisition for a 45% stake in a major offshore field in Nigeria early this year. In late April, CNOOC raised nearly US$2 billion through a share sale.

Chief financial officer Yang Hua said in a statement the financing would further optimise the company’s capital structure.

In related Nigeria/China news, in late May, Xinhua announced China will give Nigeria a $1 billion loan to fix its dilapidated railways, in another sign of China’s growing economic sway across Africa.

Nigerian Finance Minister Ngozi Okonjo-Iweala announced the deal in Abuja, Nigeria’s capital, on May 21. “Provision of infrastructure is critical for economic development,” she told a meeting, Xinhua reported.

Under the deal, China will give a concessional loan of US$1 billion while Nigeria will come up with matching funds, Xinhua reported earlier. The money will be used to fix old lines and buy new rolling stock and equipment.

For China, the Nigerian deal represents the latest in a series of moves into African infrastructure that parallel its growing trade with Africa and investments in the continent’s oil and minerals.

About James Ockenden (225 Articles)
A writer covering international energy and power markets since 1996
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