Gazprom and Nigeria agree to form oil joint venture

By Oleg Shchedrov and Felix Onuah

ABUJA (Reuters) - Russia's Gazprom and Nigeria's state-run oil company NNPC on Wednesday agreed to invest at least $2.5 billion in a new joint venture to explore and develop Africa's biggest oil and gas sector.

The new company Nigaz, a 50/50 joint venture between the two energy companies, aims to build refineries, pipelines and gas power stations throughout Nigeria.

"We have a chance to become major energy partners," Russian President Dmitry Medvedev told reporters after meeting with Nigerian President Umaru Yar'Adua in the capital Abuja.

"If we carry out all our plans, Russian investment in Nigeria can reach billions of dollars."

Nigeria has the world's seventh-largest proven gas reserves. The Gazprom deal could strengthen Russia's position as a supplier of natural gas to North America and Europe.

Some industry experts in Europe see Russia's keen interest in the West African country as an attempt to get a stranglehold on Europe's natural gas supplies.

Despite Nigeria's vast gas reserves it has been unable to develop its gas industry anywhere near full potential because of a lack of funds and regulation.

DOMESTIC FIRST