January 30, 2009

KNOC seeking legal action against Nigeria

A Korean business consortium said it would explore legal options after the Nigerian government canceled an oil exploration contract.

The consortium, lead by the Korean National Oil Co., said the contract for two oil prospecting licenses was scrapped after the Nigerian government said they had not met payment obligations, This Day reported Friday.

The Nigerian government turned the consortium's rights covering 60 percent of two deep-water oil fields in the Gulf of Guinea over to India's Oil and Natural Gas Corp.

But, the consortium, which was awarded the rights in 2005, said it has met our obligations through official negotiations with the Nigerian government and can't understand the decision.

The payment issue ... suddenly became a matter under the current government, KNOC said in a statement.

The two oil fields are estimated to contain 1 billion barrels of oil. Thirty percent of the exploration rights are owned by British firm Equator Exploration. Ten percent is owned by a Nigerian firm.