A large Chinese government oil company wants to invest over one billion US dollars in Namibia for oil exploration by obtaining a 72% stake in a Namibian licence after signing a partnership agreement with an Irish company, the National Petroleum Corporation (NAMCOR) announced Monday. Circle Oil Plc, through its wholly owned subsidiary First African Oil Corporation, and China Shine H F over the weekend signed an agreement whereby China Shine will earn a 72% interest in Circle Oil’s Namibian licence. "Circle Oil Plc currently holds a 90% interest in this licence and the wholly government owned NAMCOR of Namibia holds the remaining 10%", the joint announcement said. "The agreement is subject to a number of conditions including approval by the Namibian and Chinese Governments", it further said. The vast licence area covers about 146 000 square kilometres and lies just north of Namibia’s famous Etosha National Park, but will not affect the park. China Shine must drill at least 3 test wells between 5 000 m and 7 000m in the area.

"China Shine is estimating a budget of over US$1 billion (N$6 bn) for the Namibian

project and expects that the minimum earn-in commitment outlined above will

cost approximately US$50 million", Circle Oil said. John McKeon, director of business development and marketing at Circle Oil noted the agreement formed "the basis of a strong long term alliance with China Shine in the exploration of Circle Oil’s extensive concession in Namibia".

It is the first time a Chinese company is vying southern Africa for oil and gas exploration. Circle Oil Plc is a public company and listed on the Alternative Investment Market of the London Stock Exchange. China Shine HF is a Chinese government owned company involved in oil and gas exploration, production, development and supply of oil field equipment. The Namibian licence was awarded to it in 2003 to First Africa and was acquired by Circle Oil in March 2004.