Niger+Petroleum+and+Natural+Gas

=CNPC Highly Likely to Continue to be a Leading Block Holder in Niger=

Executive Summary:
China National Petroleum Corporation (CNPC) is highly likely to continue to be a leading block holder in Niger. China is likely to invest in Niger's oil sector, but unlikely to invest in Niger natural gas due to the lack of proved reserves. According to US Energy Information Administration, Niger has zero proved natural gas reserves. However, there are currently four blocks under oil exploration license and CNPC holds three of them, Tenere, Bilma, and Agadem blocks. Niger and CNPC also share a USD 5 billion joint venture 20,000 barrels per day capacity refinery, located in the southern city of Zinder, which is referred to the Zinder or Soraz refinery. In 2012, Niger has entered into an agreement with Chad to construct 373 miles of pipeline connecting to the Chad-Cameroon pipeline, which will make it easier for Niger to export its oil from the Agadem block. This will also be beneficial and attractive to Chinese investments to oil in Niger.

Discussion:
On 23 Nov. 2003, CNPC and the Nigerien government agreed on an exploration and development license for Block Bilma and Block Tenere. CNCP owns a 100 percent holding in Bolck Bilma and 80 percent in Block Tenere, while TG World of Canada owns the remaining 20 percent. In June 2008, CNPC and Niger signed integrated upstream and downstream deals in Agadem block. This involves both exploration and development of the oilfield, and construction and operation of a long-distance pipeline and a joint venture 20,000 bpd capacity refinery, which Niger owns 40 percent stake and CNPC the remaining 60 percent. By Nov. 2011 Agadem upstream and downstream integrated project was completed and operational. This includes a 1Mt/a oilfield, the 1Mt/a Zinder Refinery, and 287 miles of oil pipeline connecting them to each other. The project cost an estimated USD 5 billion and is located 559 miles east from the capital, Niamey. The Zinder refinery produces gasoline, diesel, fuel oil. and liquified petroleum gas.

Niger has four blocks under current explorations license, with CNPC retaining three. Kafra block is held by Algerian government owned company, SINOTRACH, Tenere block is held by CNPC in association with TG World Energy, and both Bilma and Agadem block held just by CNPC. A total of 105 wells have been drilled to date, with the highest concentration in the Agedem area, which has 76 exploration wells and 12 development wells. Niger's Government stated in a budget report that Niger's economic growth will hit 7.5 percent in 2014 from a revised 5.9 percent this year on improved petroleum production at its Agadem oil field.In 2012, Niger and Chad signed a memorandum of understanding to construct a 373 miles of pipeline linking the Agedem block to the Chad-Cameroon pipeline. This will enable Niger to export 60,000 bpd through the pipeline.

** Analytic Confidence: **
Analytic confidence is medium. Source reliability ranges from medium to high. There is no conflict between sources. The analyst had low expertise on the subject, worked alone while also collaborating with a group, and did not use a structured analytic method. The subject is moderately complex and the deadline was moderately easy to meet.
 * Analyst:** RoseAnna Wright