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Niger: $400 million oil agreement with China



Niger: $400 million oil agreement with China

The government of Niger recently signed financial agreements with China National Petroleum Corporation (CNPC), announcing a $400 million advance on future crude oil sales. The agreements, signed by Niger's Prime Minister, Ali Mahaman Lamine Zeine, and CNPC Chairman Zhou Zuokun, provide for the joint marketing of Niger's crude oil.

Under these arrangements, China will make an advance payment of $400 million to Niger, to be repaid from revenues generated by the sale of crude oil on the international market. This repayment will be spread over twelve months, with an interest rate of 7%, according to information published by the government newspaper Le Sahel.

Niger's Prime Minister stressed that these funds will be managed transparently and will be used primarily for the defense and security of the country, which faces persistent challenges linked to the violent activities of jihadist groups affiliated to Al-Qaeda and the Islamic State. In addition, these resources will also be used to meet Niger's financial obligations and to invest in agricultural development and improved medical services.

The marketing of Nigerian crude oil on the international market, initially scheduled for January 2024, will finally begin in May 2024, according to recent statements by the Chinese oil extraction authorities.

Niger, as a major uranium producer but also one of the world's poorest countries, has been producing oil since 2011, refining around 20,000 barrels a day at Zinder, in the east-central part of the country. The investment, mainly by Chinese companies to the tune of six billion dollars, has enabled the construction of a nearly 2,000 km pipeline to transport crude oil from Agadem, in southeastern Niger, to neighboring Benin. Niger's oil production is expected to reach 200,000 barrels per day by 2026.