SEOUL, Nov. 6 (UPI) -- South Korea and Nigeria signed a deal under which Seoul will offer loans to improve Nigeria's railways in exchange for a transfer of an operational oil field.
Under Monday's memorandum of understanding, Seoul will give Nigeria long-term, low-interest commercial loans and have South Korean companies help in modernizing Nigeria's railway in exchange for a stake in a yet-to-be determined oil field, the Yonhap news agency reported.
Nigeria, Africa's No. 1 oil producer, is in the process of overhauling its railway system. Yonhap reported that the $10 billion project will be the largest construction project undertaken by South Korea.
POSCO Engineering and Construction Co. signed an MOU with Nigeria's Transportation Ministry to build the railroad and Korea National Oil Corp. will operate the oil field, Yonhap said.
"South Korea is expected to get an operational oil field as a hedge against the low interest, long term loan it will give to Nigeria," the news report said. "Details about the size of the loan and oil field operations will be discussed at a working level."
The deal is part of South Korea's attempt to diversify its energy resources away from the Middle East. Asia's No. 3 economy relies imports much of its energy needs.
