Niger hopes for oil riches under northern desert

Niger plans to award oil exploration permits by the end of next month for a vast block under the Sahara desert it hopes will turn it into Africa’s newest crude producer.

The landlocked former French colony is one of the poorest states on earth but is sandwiched between oil producers Nigeria to the south and Libya and Algeria to the north. This has raised expectations among its population for a future oil bonanza.
Some 20 firms are bidding for its most prized asset, the 27,000 square km Agadem block near the border with Chad, which has proven reserves of 324 million barrels so far but needs more to become commercially viable.

“In a month’s time you will probably know who the Agadem permit has been awarded to,” Ousseini Assane Boureima, head of petroleum exploration at the ministry of mines, told Reuters in a weekend interview.

“By the end of August at the latest,” he said.

China National Petroleum Corp. (CNPC), the Chinese state company which is already exploring two other concessions in Niger, Malaysia’s Petronas, South Africa’s state-owned PetroSA, British firm Burren Energy and UK-based Tullow Oil are among the hopefuls.

Industry sources say CNPC wants sole rights for Agadem in return for building a refinery and pipeline to export the oil.

U.S. industry giant Exxon Mobil Corp. had been exploring Agadem in a joint venture with Petronas but the licence lapsed in May 2006 and Exxon pulled out after disagreement with the government over demands including the building of a refinery, Boureima said.

Reuters