According to Nigerian officials, Gazprom has already approached energy officials in Abuja about investing in Nigeria's infrastructure in return for development rights in the country.

"What Gazprom is proposing is mind-boggling," a Nigerian official told The Financial Times newspaper last week.

The official said Gazprom was positioning itself as an alternative to the already deeply invested U.S., European and Asian firms that have been doing business in Nigeria for more than five decades.

"They are talking tough and saying the West has taken advantage of us in the last 50 years and they're offering us a better deal �� they are ready to beat the Chinese, Indian and the American," said the official on condition of anonymity.

Gazprom officials confirmed that talks with Nigeria were indeed moving forward, setting the stage for the world's No. 1 gas firm to challenge longstanding players in Nigerian gas like ExxonMobil, Royal Dutch Shell and Chevron.

This isn't the first time that Gazprom has made inroads into entering the Nigerian gas sector. In November, a Gazprom official said the Russian company was seeking additional ventures in West Africa to complement its already-established relationship with Angola's state energy company Sonangol.

"Africa is definitely on Gazprom's international expansion path," said Gazprom official Christophe Gerard during last year's Africa Upstream oil conference. "We are ready to acquire assets. We have the money to do it."

Gazprom will most likely have to explore for untapped sources of gas in the West African country, as other major players already in Nigeria have well-established claims to areas of extraction.

So far, Gazprom seems undaunted by the prospect of having to seek out new gas reserves in the often-volatile Niger Delta, where militant groups have stepped up attacks over their anger with the government and its handling of the country's oil and gas profits.

Militant groups like the Movement for the Emancipation of the Niger Delta have been waging a steady campaign of attacks aimed at foreign oil interests and Nigerian forces in the delta for more than two years. In 2007 alone, more than 200 people were kidnapped and several Nigerian police and soldiers killed.

Since the 1970s, Nigeria, Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. But high unemployment in the delta, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered some of the region's youth and incited them to take up arms.

For his part, Nigerian President Umaru Yar'Adua said that in 2008 the security of the oil-producing delta would be chief among his concerns, adding the government would allot one-third of the country's $20 billion budget for the military and development projects in the region in hopes of stemming the violence.

The decision has garnered the praise of both political allies and foes, though many in the delta remain skeptical if the money being promised will make its way down through a notoriously corrupt government.

In addition to his crackdown on militancy, Yar'Adua has also taken foreign energy firms to task for not taking measures to reduce wasteful gas flaring.

Gazprom has reportedly offered to build a project in Nigeria as part of its proposed deal to capture the large quantities of gas burned off during oil production, an offer that could prove particularly enticing to Yar'Adua.

(e-mail: [email protected])

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