The prolonged dispute between Niger and its Chinese oil partners has finally reached a resolution. The government in Niamey has confirmed the successful conclusion of negotiations with companies involved in upstream oil operations and the pipeline transporting Nigerien crude to the Atlantic. This agreement puts an end to a lingering crisis that emerged shortly after General Abdourahamane Tiani took power in July 2023, threatening the country’s primary source of foreign exchange.

Oil tensions flare under General Tiani’s leadership

The friction between Nigerien authorities and Chinese operators centered on critical issues such as contract financial terms, taxation, local governance of joint ventures, and employment conditions for expatriate staff. The China National Petroleum Corporation (CNPC), a long-standing player in Niger’s oil sector, holds a dominant position in both the Agadem oil block and a significant stake in the pipeline linking southeastern Niger to the port of Sèmè in Bénin. This nearly 2,000-kilometer pipeline, operational since 2024, was intended to position Niger as a net exporter of hydrocarbons.

However, political tensions between Niamey and Cotonou, stemming from the 2023 coup and subsequent regional sanctions, severely disrupted the project’s execution. On the Chinese side, multiple executives were expelled earlier this year, and work permits were revoked. Niamey also accused its partners of delays in disbursing a $400 million advance payment tied to future oil sales.

Discreet mediation leads to compromise favored by Niamey

Negotiations, conducted largely behind closed doors, involved envoys dispatched from Beijing alongside high-ranking officials from Niger’s Ministry of Petroleum. Details emerging suggest the settlement includes revised tax terms, rescheduled financial commitments, and a renewed framework for the presence of Chinese personnel at production sites. The transitional government frames this outcome as a tangible demonstration of its economic sovereignty doctrine, all while maintaining ties with a strategic partner that has been active in the country for nearly two decades.

The timing of this resolution is strategic. With Niger facing persistent regional instability and the suspension of several Western partnerships, officials view oil revenue as one of the few short-term levers for macroeconomic stability. Authorities anticipate a substantial increase in crude exports via the pipeline, contingent on restored logistical ties with Bénin and the full resumption of Chinese-operated facilities.

Beijing strengthens its influence in the Sahel

For China, the resolution carries broader implications beyond Niger’s borders. The CNPC and its subsidiaries have invested billions into the country’s oil infrastructure, and a failure to resolve the dispute could have undermined Beijing’s standing in other Sahelian jurisdictions seeking to overhaul their mining and energy partnerships. Conversely, a negotiated settlement without rupture with a military-led regime reinforces China’s narrative of a pragmatic partner, resistant to external interference and capable of engaging on equal footing with internationally contested authorities.

Yet, the challenge of effectively marketing the crude remains unresolved. Until full relations between Niamey and Cotonou are restored, the volumes transported via Sèmè will remain below the pipeline’s nominal capacity of approximately 90,000 barrels per day. Authorities are exploring alternative options, including a potential connection through Chad, though the industrial feasibility of such a route remains distant. The agreement with Chinese firms provides temporary relief, but it does not eliminate all constraints weighing on the sector.