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Reuters: China firms quit bids for Shell block in Nigeria

Mon Feb 25, 2008 5:55am EST

BEIJING (Reuters) – PetroChina, China’s largest oil firm, aborted its bid for an offshore oil block in Nigeria offered by Royal Dutch Shell a few months after offshore specialist CNOOC withdrew its bid for the block, an industry source said on Monday.

Both companies were told their bids, at around $300 million to $400 million, were too low for Shell’s nearly 50 percent stake in block OML 125, the Beijing-based source familiar with the matter told Reuters.

The source did not provide the production level of the block.

“Both companies were told their bids were below other competitors,” said the source, without elaborating.

A PetroChina spokesman was not immediately available for comment. An official with CNOOC, parent of CNOOC Ltd, said his department only tracks mergers and acquisitions that go through.

The Lagos-based Centre of Petroleum Information, an industry information service, has reported that Shell owned 49.8 percent and Italy’s Eni group owned 50.2 percent of OML 125, which produces about 24,000 barrels of oil per day.

The source said Shell’s sale of the block was part of the oil major’s restructuring program initiated last November, after its oil production facilities in the Niger Delta came under repeated militant attacks and lost significant production.

China’s biggest investment in Nigeria, Africa’s largest oil producer, is a $2.69 billion deal CNOOC Ltd entered into in 2006 for a stake in deepwater block OML 130, set to come on stream this year.

PetroChina is working on four exploration blocks but only at study stages, the industry source said, without providing further details.

(Reporting by Chen Aizhu; Editing by Edmund Klamann)

© Reuters 2008 All rights reserved

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