Oil talks stall between Nigeria, China: adviser. China wants the oil for less than its worth! Classic!

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ABUJA

Talks between Nigeria and China over Beijing's bid to buy 6 billion barrels of the OPEC member's oil reserves have been stalled for months due to a dispute over price, a senior Nigerian government official said on Monday.

China last year offered to invest as much as $50 billion to acquire a large stake in Africa's biggest energy sector, a bid which included incursions into some oil blocks held by Royal Dutch Shell, ExxonMobil and Chevron.

"We have not had any discussions with China for several months," Emmanuel Egbogah, Nigeria's presidential adviser on energy, told Reuters in the capital Abuja.

"We have made our position clear. We told them we want a fair market value for our oil."

Egbogah declined to specify how much Nigeria was seeking for its oil, which usually sells at a premium in the physical crude markets because it can be more easily refined into fuel products than Middle Eastern grades.

Egbogah reiterated that China was unlikely to be given all the reserves it wanted.

The last reported talks between the two countries occurred during Chinese Foreign Minister Yang Jiechi's trip to Nigeria in January.

Egbogah said Nigeria remained open to talks with China, but no date had been set for another round of negotiations.

Leverage

Industry executives have said Nigeria is using the possibility of a Chinese bid for its oil as leverage in difficult contract renewal negotiations with its existing Western oil partners.

Exxon is the only one so far to obtain a renewal for its three shallow water oil licences, which currently produce around 580,000 barrels per day, for a further 20 years.

But that agreement has come under doubt as it has not been formally signed off on by Nigeria's oil minister, local newspaper ThisDay reported last week.

Egbogah declined to comment on the story, while Exxon said it does not disclose details of business discussions.

Egbogah also said the government had yet to approve Shell's sale of three Nigerian oil licences to a consortium consisting of two local firms and France's Maurel & Prom.

Shell in January agreed to sell oil mining leases 4, 38, 41 located in the northwestern part of the Niger Delta. The leases include 30 wells with a production capacity of around 50,000 barrels of oil equivalent per day.

"Shell must present this request of divestment to the government. We have not received that yet," Egbogah said. (Reuters)