A peek into how 'terrorists' buy oil rights


A short article from Oil and Gas Journal offers a rare peek into how countries and companies bid for oil rights in foreign countries, how the money changes hands... and how Nigeria tried to bring a resistance group that's been actively trying to shut down the country's oil production into the fold of the petro-establishment. The article is sub req'd (and was published May 22), so read it here:

Nigeria amazed observers Friday by awarding one of its blocks in a mini licensing round to a company controlled by local youth militant groups that have battled the government. Companies from China and India also emerged as big winners in the offering, thanks to promises of heavy investment in the downstream sector and power infrastructure.
The militants' company, Niger Delta United Oil Co., was awarded Block 233 in the onshore Niger Delta after offering a signature bonus of $11 million. Government officials described the move as an attempt to create peace in the troubled region. "I was delighted that the Niger Delta company paid their full deposit, surprised but delighted," Tony Chukwueke, head of Nigeria's Department for Petroleum Resources, told Oil Daily from the awards venue. "This is an attempt by the government to create some emancipation in the Niger Delta and to show commitment to the development of the region, but done by the people of the region themselves ."
Little is known about the company, even by Chukwueke.
"What we are trying to do is to try and push all the different groups together," said Chukwueke. "Then they can choose someone to head the company. At the moment I don't know who that is. They do have an office in the Delta and they came with a bankers check to pay the 25% of the deposit."
Most of the 17 offered blocks were taken up. China National Petroleum Corp. (CNPC) won four areas -- Blocks 721, 732, 298 and 471 -- for a total of $16 million in bonuses.
A joint venture between India 's state-controlled Oil and Natural Gas Corp. (ONGC) and the private-sector Mittal Steel won Blocks 285 and 279, which were two of the most contested areas due to their proximity to Exxon Mobil's Erha field. The venture offered signature bonuses of a combined $125 million, partly by matching a rival bid.

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