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August 28, 2005
Nigeria set for crude oil auction
Nigeria is expected to announce the winners of dozens of new oil exploration contracts on Friday.
Hundreds of oil firms from Asia, the US and Europe are taking part in Nigeria's first fully open oil rights auction.
The plots stretch from Lake Chad in the north-east of the country to the Gulf of Guinea in its south-western corner.
Firms are excited about the prospects in Nigeria - Africa's top producer and a member of oil exporter group, Opec.
They will have to pay "signature bonuses" of between $500,000 (£277,000) and $50m per land parcel should they be chosen. One corporate official described the plots as "virgin territory" with the potential for surprises.
Adding to the interest is the fact that the price of crude has surged to record levels.
Many economists are predicting that the cost of a barrel could go even higher and may even break the $100 mark.
The cost has driven petrol prices up sharply in Nigeria itself, sparking calls for strikes and long queues at those filling stations which remained open.
'Hurry to develop'
According to the Reuters news agency, Nigeria has already awarded two firms preferential rights over five plots after they promised to invest in the country's infrastructure.
Foreign oil companies have been criticised for failing to improve the lot of Nigerians living near their operations.
There have also been clashes with disgruntled locals and a number of kidnappings in the Niger Delta, where most of Nigeria's oilfields lie.
Minister of State for Petroleum Edmund Daukoru was robust in his defence of the decision to award the contracts to Korea National Petroleum and Chinese Petroleum of Taiwan ahead of Friday's auction,
"The best bidders have not helped with our national aspirations," Mr Daukoru told Reuters in an interview.
"No operator has talked railway to me, no operator has talked shipyard, no operator has talked about so much generation, apart from these toy things of 250 megawatts," he said.
"We are in a hurry to develop. The oil industry has been an enclave industry. We want to break out of the enclave and merge with the greater economy."
However, correspondents say it would be unfair to lay all the blame for Nigeria's slow pace of development at the door of multinational oil companies.
The country has been wrestling with high levels of corruption which, coupled with mismanagement of resources and the cost of repaying debts, mean that some 60% of Nigerians live in poverty.
Posted by Publisher at August 28, 2005 12:53 PM
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