The South Korean government announced on Monday that it will invest in Nigeria's railway modernization in exchange for the African country's transfer of stakes in an operational oil field to Seoul.
The announcement came after South Korean Commerce, Industry and Energy Minister Chung Sye-kyun and Nigerian Oil Minister Edmund Daukoru signed a memorandum of understanding (MOU) in Seoul on the project.
Under the MOU, South Korea will offer long-term, low interest commercial loans to Nigeria and let South Korean companies take part in the second phase of Nigeria's railway modernization program in exchange for stakes in an operational oil field in the African country.
According to South Korea's Yonhap News Agency, the railway project requires an estimated cost of US$10 billion and will be the largest single construction project ever undertaken by South Korean builders.
Nigeria plans to replace a 1,500-km-long railway, which links Port Harcourt on the Gulf of Guinea with Maldugun in Nigeria's northeastern region, with new standard gauge tracks.
Nigeria is moving to update its huge rail system by allocating US$35 billion in a four-phase project, Yonhap said.
The MOU is part of South Korea's ongoing efforts to secure overseas oil and gas fields by pledging to build up the power generation and industrial infrastructure of resource-rich countries, Yonhap said.
The South Korean government set a target to raise its self- sufficiency in energy from the current 4 percent to 18 percent by 2013.
The MOU was signed during a state visit by Nigerian President Olusegun Obasanjo from Monday to Tuesday in Seoul. Obasanjo held a summit with South Korean President Roh Moo-hyun early Monday.
(Xinhua News Agency November 7, 2006)
