LAGOS, Nigeria, Oct. 23 (UPI) -- China has intensified its campaign to scoop up Africa's massive mineral resources, particularly oil, and Nigeria, a key supplier to the United States, is one of Beijing's main targets.
Major oil leases long held by U.S. and European oil companies such as Chevron and Royal Dutch Shell are up for grabs, and China's state-run oil corporations are putting up billions of dollars to take them over.
According to Forbes.com, the Chinese move "has huge ramifications for natural resource prices, not the least of which will be the cost of imported oil to the United States, and ultimately the stock market and economy."
The focal point of the Chinese push is Nigeria, where 16 blocks containing 6 billion barrels of oil are up for auction when the current leases run out.
China, which has already acquired access to vast oil supplies across Africa, Asia and Latin America in recent years, is ready to pay top dollar to gain the Nigerian blocks.
This has Western companies worried. Executives of Chevron, Shell, Exxon Mobil and others have been huddled with Nigerian Oil Ministry officials in recent days in what The Financial Times calls "crunch talks" on overhauling the oil industry, the largest in sub-Saharan Africa, amid China's drive to muscle in on what has traditionally been Western turf.
The government in Abuja, Nigeria's administrative capital, wants to increase the price of the leases that these companies have held, in some cases for 40 years, by billions of dollars.
The companies are reluctant to comply, but China's high-rolling intervention has greatly strengthened the government's bargaining position.
The Financial Times reported in September that the China National Offshore Oil Corp., China's third-largest oil company, proposed buying 49 percent stakes in 23 blocks, including some of those up for lease renewal. That would give it access to one-sixth of Nigeria's crude reserves.
One-year lease extensions taken out by Exxon Mobil and Chevron are slated to expire at the end of November. Shell, meantime, has won a court injunction blocking any change of ownership of its leases.
The Western firms are also under pressure from another direction: The government's Petroleum Industry Bill now before Nigeria's Parliament seeks to raise the government's take from foreign companies from 82 percent to 93 percent. That's among the highest in the world.
Nigeria's oil industry, the backbone of its economy, has suffered badly from underinvestment and a tribal insurgency in the southern Niger Delta. These have reduced production levels by one-third.
Elsewhere in Africa, China is engaged in negotiations with the military government of the West African state of Guinea, one of West Africa's poorest states and currently torn by political violence, for large oil and mineral deals potentially worth billions of dollars.
Guinea is the world's largest producer of bauxite and has sizeable deposits of gold, diamonds, uranium and iron ore. Recent oil discoveries in neighboring Ghana indicate that Guinea could also have crude reserves.
Guinea wants the China Investment Fund to fork up most of the financing for infrastructure projects worth $7 billion in return for access to the country's mineral wealth.
That would pit China once more against Western oil companies, but the $7 billion investment deal would be a lifeline for Guinea's embattled government.
The Hong Kong-based CIF, partnered with oil-rich Angola's state oil company Sonangol, seeks exclusive rights to explore and develop oil reserves in 64 percent of an offshore block that the Guinean government will reclaim from a Texas-based company at the end of the year.
Another major Chinese oil company, Sinopec, works with Sonangol in Angola, currently sub-Sahara Africa's leading oil producer.
The Chinese have not had things all their own way though. Libya has blocked a $462 million bid by CNOOC, Sonangol and Verenex Energy Corp. to buy into a major oil field.
