China National Petroleum Corporation (CNPC), the Chinese state-owned oil giant, has continued to export crude oil from its newly expanded Agadem oilfield in Niger, even as it faces ongoing disputes with the Nigerien government over employment practices and worker benefits. According to sources familiar with the matter, CNPC’s operations have generated more than $2 billion in revenue, highlighting the economic importance of the project for both parties. However, tensions have risen following disagreements about hiring more local workers and improving their compensation packages.
The conflict intensified in March when three senior CNPC executives were expelled from Niger due to a significant pay gap between local employees and Chinese expatriates. This was followed by government directives in May ordering additional experienced Chinese expatriates to leave the country, further straining relations. Despite these setbacks, CNPC has remained committed to its operations and continues to negotiate with the Nigerien government in hopes of resolving these issues. Both CNPC and a spokesperson for the Nigerien government declined to comment on the ongoing negotiations.
Investment and Expansion: CNPC’s Role in Niger’s Oil Industry
CNPC’s presence in Niger serves as a showcase for its ability to develop an oil industry from the ground up in one of Africa’s most impoverished nations. The company has invested over $5 billion in the region, constructing an oilfield, building a refinery, and laying a 1,950-kilometer pipeline—the longest in Africa—to transport crude oil from Agadem to the port city of Cotonou in neighboring Benin. This ambitious project has transformed Niger’s energy sector, but it has also brought about complex challenges concerning workforce composition and resource management.
Oil minister Sahabi Oumarou initially requested that CNPC and its refinery subsidiary SORAZ terminate contracts for expatriates who had been working in Niger for more than four years. However, this directive has not yet been implemented, according to sources based in Niamey. One of the central points of contention is the government’s demand that local hires at CNPC-led projects be increased to 80 percent, up from less than 30 percent currently. CNPC argues that this goal is unrealistic due to a lack of trained and skilled local personnel.
Export Success: Meleck Crude Reaches Global Markets
Despite ongoing disputes, CNPC has achieved significant progress with its phase-2 development at Agadem. The field now operates at full capacity, pumping 90,000 barrels per day. The crude oil—known as Meleck—is exported through the CNPC-built pipeline directly to international markets via Benin’s Cotonou port. Ownership of the Agadem field is divided among CNPC (65%), Taiwanese state firm CPC (20%), and the Nigerien government (15%).
To date, CNPC has exported approximately 32 million barrels of Meleck crude, which is well-suited for producing low-sulphur marine fuel. Major buyers include global trading houses and Chinaoil, CNPC’s own trading arm. With prices ranging from $65 to $70 per barrel, these exports have contributed over $2 billion in revenue so far.
Production at Agadem began in 2011 under a phase-1 agreement with Niger’s then-civilian government. The initial output of 20,000 barrels per day feeds the SORAZ refinery in southern Niger—a facility built and majority-owned by CNPC—which supplies fuel domestically within Niger.
Political Change and Resource Control Efforts by Niger’s Government
The political landscape in Niger shifted dramatically following a military coup in 2023 that brought a junta government to power. Like several other countries in Africa’s Sahel region, Niger’s new leadership has sought greater control over its natural resources as part of broader efforts to assert national sovereignty. These moves reflect a growing trend among governments in resource-rich but economically challenged nations to renegotiate terms with foreign investors and increase local participation in critical industries.
Negotiations between CNPC and the Nigerien government remain ongoing as both sides work to address concerns over labor practices, expatriate employment, and resource management. The outcome will likely shape future foreign investment strategies not only for CNPC but also for other multinational corporations operating in Africa’s energy sector.
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