Beijing, January 9:

China’s largest gas and oil producer CNOOC said today it had agreed to buy a 45 per cent stake in an oil block off the coast of Nigeria for almost $2.3 billion. The Hong Kong-listed unit of the China National Overseas Oil Company (CNOOC) said it had signed a definitive agreement with South Atlantic Petroleum Ltd to acquire the stake in the block labelled OML 130 in the Niger Delta.

The purchase would be funded from internal resources, a CNOOC statement said. OML 130 is covered by both a production sharing agreement and a production sharing contract, each of which governs a 50 per cent interest in the oil block. South Atlantic Petroleum is currently the sole contractor and 100 per cent interest holder in the production sharing contract.

Under the pact, CNOOC will acquire a 90 per cent interest in that contract which equates to a 45 per cent working interest in the block. CNOOC said OML 130 covers an area of about 500 square miles in the Niger Delta.