Eric Watkins
Senior Correspondent
LOS ANGELES, Nov. 7 -- South Korean Commerce, Industry, and Energy Minister Chung Sye-kyun and Nigerian Oil Minister Edmund Daukoru signed a memorandum of understanding Nov. 6 that envisions upgrading the African country's rail system in exchange for oil interests.
South Korea will provide Nigeria with long-term, low-interest commercial loans and have its companies take part in the second phase of Nigeria's railway modernization program. In exchange, Nigeria will transfer shares in an operational oil field to South Korea.
POSCO Engineering & Construction Co. has already signed a separate agreement with Nigeria's Transportation Ministry to build the railroad, while Korea National Oil Corp. will operate the oil field. Officials said details about the size of the loan and oil field operations would be discussed at a working level.
The $10 billion railroad project calls for 1,500 km of tracks linking oil capital Port Harcourt on the Gulf of Guinea to Maldugun in Nigeria's northeastern region.
Nigeria made a similar deal with China in late October in an $8.3 billion contract to construct a railway line from the nation's economic capital Lagos to Kano, the largest commercial city in the north.
The Chinese, hoping to secure oil interests in Nigeria, recently granted the African country a $2.5 billion loan facility, a substantial amount of which would be used on the rail project.
Contact Eric Watkins at [email protected].
