French Company Sells Oil Stake in Nigerian Waters for $2.5 Billion

French oil company Total SA said Monday it had sold its stake in an offshore oil field near Nigeria for $2.5 billion to the Chinese state-run firm Sinopec Corp., a sign of the China's growing stakes in the West African nation's oil production.
The field includes Total's deep-water Usan production operation, which opened earlier this year and has a production capacity of 180,000 barrels a day. That facility has a storage capacity of 2 million barrels, the company has said. The field is about 62 miles (100 kilometers) from the West African nation's southeastern coast.

Total said the sale matched its plans to raise cash for new ventures.

"This sale of an asset operated from a minority position will allow us to focus our resources on the material growth opportunities in Total's portfolio," Yves-Louis Darricarrère, president of upstream operations at Total, said in a statement.

Total said the deal, done for cash, must be approved by Nigerian authorities. Officials with Sinopec could not be immediately reached for comment.

The state-run Nigerian National Petroleum Corp. is the concession holder on the field. Other partners include Chevron Corp, Esso E&P Nigeria Ltd. and Nexen Petroleum Nigeria Ltd. Nigeria's state-run firm also would have final say on the sale. A spokesman for the corporation could not be immediately reached for comment Monday.

Total is one of several foreign oil companies that operate in Nigeria, a nation that produces more than 2 million barrels of oil a day and remains key to U.S. gasoline supplies. Addax Petroleum, a subsidiary of Sinopec, already pumps crude oil from Nigeria, although it is a relatively small amount compared to other Western companies operating there.

The move by the Chinese comes after the country has increasingly offered loans and assistance to Nigeria. China is increasingly looking across Africa for raw minerals and supplies to fuel a massive economy that has slowed in recent years during the economic downturn. China also has been mentioned as a possible bidder for oil blocks in the country, though experts believe past Nigerian governments only have used the Chinese interest to force Western firms to increase their own bids.

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SOURCE: YINKA IBUKUN AND JON GAMBRELL 
ASSOCIATED PRESS

Jon Gambrell reported from Johannesburg and can be reached at WWW.TWITTER.COM/JONGAMBRELLAP .
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