China and Nigeria agree oil deal

Hu Jintao is keen to build trade ties in Africa

China has secured four oil drilling licences from Nigeria as President Hu Jintao continues his week-long tour of Africa, his second in three years.

In exchange China will invest $4bn (£2.25bn) in oil and infrastructure projects in Nigeria.

China will buy a controlling stake in Nigeria's 110,000 barrel-a-day Kaduna oil refinery and build a railroad system and power stations.

Nigeria, Africa's top oil exporter, has long been viewed by China as a partner.

Exploration blocks

The African nation will offer first right of refusal to China National Petroleum for a quartet of exploration blocks during a licensing round due to be held in Nigeria on 19 May.

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The blocks comprise two areas in the oil-producing Niger Delta - one onshore and one in shallow water - and two areas in the higher-risk inland Chad basin, where no oil is produced at present.

Last week Chinese state oil firm CNOOC said it had completed a £2.3bn deal to buy a stake in a Nigerian oil field.

As well as meeting his Nigerian counterpart Olusegun Obasanjo, President Hu will also address a joint session of the Nigerian national assembly.

Factory construction

The visit indicates the importance China is attaching to securing energy and trade deals in the region.

Nigeria has the oil and gas that China wants, but also provides a potential market for Chinese goods.

Several Chinese companies have already constructed factories in Nigeria and more are planned for a free trade zone in the south-east of the country.

President Hu, who previously visited Nigeria in 2004, started his African trip in Morocco where he signed a number of trade deals with King Mohammed VI.

The visit comes in the wake of a series of others to Africa by Chinese ministers and officials.