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Niger Wants Audit on Chinese JV Oil Refinery

Source: Reuters 11/24/2011, Location: Africa

The West African state of Niger said it will commission an audit on the cost of an oil refinery built by its joint venture with Chinese oil company CNCP after the price tag rose to $980 million from the $600 million agreed at signing.

The announcement on state television came days before Monday's official inauguration of the 20,000 barrel-per-day Soraz plant near the town of Zinder, some 900 km (560 miles) east of the capital Niamey.

"Niger is going to commission an audit on the cost of the refinery and the Chinese are in agreement with that. If it turns out that there are questions over the price, we will go back to the negotiating table with our partner," Energy Ministry spokesman Lawan Gaya said.

Gaya said a reduction in the price would be felt in lower local petrol prices from oil refined at Zinder. Some 7,000 bpd is intended for local use.

CNPC signed a $5 billion deal with Niger in 2008 to build the refinery and develop crude oil from the Agadem field a further 700 km east. It is due to start commercial production soon and will supply the refinery with oil. The Soraz refinery is 60 percent-owned by CNPC and 40 percent by Niger.

Niger, whose uranium supplies the French nuclear industry, initially put its oil reserves from Agadem at 268 million barrels, but the estimate has risen to 480 million barrels following tests.

Gaya said Niger had already awarded four out of a total 35 blocks across the country and said Algerian state energy firm Sonatrach was due to start drilling in the northern block of Kafra next year.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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