Nigeria cancels Korean firms' right to oil fields

SEOUL, Jan. 29 (Yonhap) -- The Nigerian government has nullified a contract with South Korean companies that allowed them to explore its offshore oil fields, citing unfulfilled financial obligations,
industry sources said Thursday.

Under the contract signed in March 2006, the Nigerian government agreed to give a
South Korean consortium the right to develop two offshore oil fields estimated to
hold up to 1 billion barrels of oil each. In return, the consortium promised to
build an energy infrastructure for the African nation.
The consortium, led by the state-run Korea National Oil Corp. (KNOC), currently
holds a 60 percent stake in the two oil fields. "We were recently informed by the
Nigerian government that it nullified the contract," a KNOC official said. "We
are considering how to respond."
The Nigerian government canceled the contract, saying the Korean companies did
not fulfill their obligation to pay around $231 million in signing bonuses out of
a promised $323 million.
The consortium countered by saying that "both sides agreed to reduce the total
amount in return for our promise to build an energy infrastructure."
The consortium is reportedly considering lodging an official complaint over the
unilateral move by the Nigerian government through diplomatic channels and, if
necessary, taking legal action to regain the revoked oil-exploration rights or
retrieve money invested.
kokobj@yna.co.kr
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