China's top offshore oil and gas producer China National Offshore Oil Corp Limited (CNOOC) said yesterday it had completed a deal to buy a share in a Nigerian oil mining license in its biggest-ever overseas acquisition.

The Beijing-based oil company bought a 45 percent stake in Nigeria's OML 130 oil area, also known as Akpo, from privately owned Nigerian firm South Atlantic Petroleum Ltd, CNOOC said in a statement.

In January, it had said it would pay US$2.27 billion in cash for the stake, but in yesterday's announcement it said it was paying an additional US$424 million for financial, operating and capital expenses.

"The completion of this transaction represents a milestone in our efforts to expand into the world's most prolific oil and gas basins," Chairman Fu Chengyu said.

The Akpo field, about 200 kilometers off the coast of Port Harcourt, will be able to pump 225,000 barrels a day of oil when fully operational in 2008, or nine percent of Nigeria's current production, according to drilling operator, Total SA.

CNOOC has said it would contribute more than US$2 billion to develop the field.

Last year, the firm offered US$18.5 billion for California-based Unocal, but withdrew its bid in August in the face of political opposition in the United States that the multi-billion takeover would threaten its national energy security.

CNOOC's shares have risen 24 percent since it first announced the Nigeria purchase on January 9, outperforming the 8.3 percent gain on the benchmark Hang Seng Index.

It made a 2.2 percent gain yesterday on the Hong Kong Stock Exchange to close at HK$6.85 (88 US cents).

In another development, CNOOC on Wednesday said it would invest about 100 billion yuan (US$12.3 billion) over the next five years to speed up deepwater drilling along the coast of China and increase output.

It plans to strengthen partnerships with foreign companies and also develop its own technologies in deepwater oil and gas development, according to Tan Dongling, a CNOOC development and planning manager.

By 2010, more than 50 new gas and oil fields will be completed and put into production.

The new fields, 24 of which are under construction and 13 being assessed for development, are located mainly in East China's Bohai Sea, the Pearl River estuary and the Beibu Gulf in the South China Sea, Tan said.

Also on Wednesday, CNOOC announced that operations have begun in its new gas field in the eastern part of the South China Sea.

The field, Huizhou 21-1, produces 54 million cubic meters of natural gas per day. CNOOC holds a 51 percent stake in it.

(China Daily April 21, 2006)