COMMENT Nigeria’s relations with western oil companies have long been volatile. They are now coming under extra strain. Violence in the Niger delta, theft of oil and underinvestment are costing billions of dollars in lost revenue each year. Government plans to overhaul the industry have heightened tensions.
On top of this, a Chinese bid to wrest control of a sixth of Nigeria’s proven crude reserves risks bringing matters to a head. State-owned CNOOC’s offer for stakes in 23 prime oil blocks, all of which are part or wholly controlled by western oil groups, may have strengthened Nigeria’s negotiating hand. This, at a time the government wants to impose higher costs on the companies, renegotiate contracts and win a better price for the renewal of licenses that expired last year. The Chinese are offering better terms. In effect, western groups are being asked to put up or shut up.
