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Nigeria steps in over block row



By Upstream staff 

Nigeria said today it wanted the Korean National Oil Company (KNOC) and India's Oil & Natural Gas Corporation (ONGC) to be partners in two oil exploration blocks amid conflicting statements by the companies about share ownership.

ONGC has sought Indian government approval to take 90% of blocks 321 and 322, off Nigeria, but KNOC said it retained rights to a 65% stake in the highly prospective offshore areas.

"We want them to be partners. We don't want any of them to go. We are looking for investors in Nigeria and we don't want investors to leave in a quarrel over one block when we have so many," Tony Chukwueke, head of Nigeria's Department of Petroleum Resources, told Reuters by telephone.

Nigeria gave KNOC preferential rights to 65% in both blocks last August in return for huge promised investments in Nigerian infrastructure. It auctioned a 25% stake and ONGC emerged as the winner with a combined bid of $485 million, with 10% reserved for a Nigerian partner.

The two companies then began talks to finalise the contract by a 15 December deadline and pay the bonus, when differences emerged, Chukwueke said.

"There have been some communications that were sent to ONGC in December, resulting from information given to the Department by ONGC that the Koreans were no longer interested," Chukwueke said.

"As the government wanted to recover its signature bonus, we told ONGC to come and pay the bonus in full. That was where the confusion started," he said, adding: "KNOC is still clearly in the game."

"We, as government, had difficulties reaching the Koreans when we needed them, whereas ONGC was always around," he said, adding that the two companies had failed to reach an agreement at a meeting called for last week.

Chukwueke said he aimed to resolve the dispute over the next few days.


Thursday, 02 February, 2006, 10:57 GMT  | last updated: Thursday, 02 February, 2006, 11:30 GMT

Whose stake: both ONGC and KNOc have made claims to blocks 321 and 322, off Nigeria
 

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