Niger Pockets $400M Advance from China for Oil

On 12 April 2024, the Niger PM Lamine Zeine and the Chair of the China National Petroleum Company (CNPC) ZHOU Zuokun signed a sales agreement to supply oil to China. As per the contract, Niger will receive an advance of USD 400 million.

The advance can be considered as a loan guaranteed by oil. Repayments will be deducted from the proceeds accrued from the sales of oil over an expected period of 12 months starting from May 2024. The advance carries an annual interest of 7%. The Niger PM Zeine indicated that the money will go towards developing the security, agriculture and health sectors.

According to the contract, the Government of Niger holds a 25.4% stake in the JV with CNPC. The oil field under joint exploitation is situated in the Agadem region and currently produces 90,000 barrels per day (bpd). In the near future, production is expected to climb to 110,00 bpd. In addition to Agadem, CNPC has also been exploiting another bloc in Bilma since 2003.

“The absolute priority is the reinforcement of the security of our territory. Thus, defence and security in particular are our number one priority.”

Niger PM Lamine Zeine

The oil will be transported via a pipeline, which is nearly 2,000 kilometers long, to the port of Seme in Benin. The pipe itself necessitated a massive investment of USD 6 billion, with financing coming mostly from CNPC.

It is worth noting that Niger is under economic sanctions from ECOWAS and WAEMU following the coup in July 2023. Therefore, the terms of the deal may not be as favorable to Niger, given that the Government of Niger has limited options.