Nigeria offers 100% stake in OPL-321 and OPL-323

Vol 9, PW 20 (26 Jan 06) People & Policy

Nigeria is willing to offer ONGC Videsh 100% stake in two offshore blocks earlier promised to Korea National Oil Company (KNOC).

The blocks in question are: OPL-321 and OPL-323. Nigeria has told us it is willing to give us 100% stake in the two blocks, reveals a source.

This will certainly come up for discussion during Daukorus visit. Nigerian oil minister and OPEC president Dr Edmund Daukoru is scheduled to visit Delhi later in the year.

In August last year, Nigeria stunned OVL by unexpectedly offering a majority 65% stake in OPL-321 and OPL-323 to KNOC and 10% to the Nigerian Oil Company, its local partner. OVL was offered only 25% despite promising a total of $485 in signature bonuses in exchange for a majority stake in both fields: $175m for OPL-321 and $310m for block OPL-323.

Despite its inability to match OVLs offer, Nigerian authorities unexpectedly offered a majority stake in both fields to KNOC. One week before the award announcement, KNOC exercised pre-emption rights that it had been arbitrarily granted by Nigerian authorities by promising that it could match OVLs signature bonus.

At the time, Daukoru defended the decision to give KNOC preferential rights. (South) Korea has promised to build railroads and power plants in Nigeria, he said.

Relationships between countries don't go in the cycle in which oil rounds come about. If in the middle of planning a round Nigeria feels that it wants to have good economic relations with another country that promises to do major infrastructure projects, as a sovereign nation, we have the right to do a package.

Perhaps, but what if the company fails to deliver Nigeria appears to have now accepted that the KNOC company is unwilling to match OVLs signature bonus and that the deal with Korea National Oil Company is dead. Can Daukoru re-ignite Indias interest in the two permits