A foremost consultancy firm, Chatham House, in a special report revealed that Nigeria mismanaged relations with Asian oil firms, resulting in failure to capitalise on deals which could have helped it develop her infrastructure; and leaving $20 billion worth of investment at risk.

Former President, Olusegun Obasanjo sought partners in China, India, South Korea and elsewhere to buy oil blocks before leaving office in 2007, in return for billions of dollars of infrastructure and downstream investment; but two years later, not a single barrel of oil has been produced by Asian national oil companies in Nigeria nor has any downstream commitment been started, leaving the economy with no tangible benefit, the London-based organisation revealed.

"President Obasanjo’s stated grand design to achieve a ‘development dividend’ through the oil-for-infrastructure scheme with Asian national oil companies has fallen apart, and with it went the impact that it might have made on the Nigerian landscape," Chatham House said in its report.

Five decades of oil extraction in Africa’s most populous country have enriched a small elite, but the vast majority of the country’s 140 million people still live on two dollars a day or less.

The firm blamed the lack of progress on political interference in what should have been purely business decisions.

"The scale of the corruption, mismanagement and non-execution of projects in the Obasanjo years has sent shockwaves through Nigeria," the report said.

"His intentions were good but officials failed to spell out the full implications of the scheme. And many used the scheme for private profit. It might have been a good idea on paper but the spirit was breached in the implementation."

The administration of President Umaru Yar’Adua, who took office in May 2007, has been reviewing deals struck under Obasanjo, cancelling the sale of oil refineries and reviewing oil licensing rounds.

Yar’Adua in January revoked two oil exploration licenses awarded to Korea National Oil Corp (KNOC), saying the Korean firm had failed fully to pay the investment pledged.

KNOC, which says it met its obligations, has taken the case to court and the outcome is being closely watched by an industry concerned that rights awarded by one Nigerian government can easily be overturned by the next.

Chatham House said that following the cancellation of a Korean gas pipeline project and a contract with China to build a railway from the commercial hub Lagos in the south to the city of Kano in the north, $20 billion of investment promised by Asian national oil companies in 2005/06 was at risk. Chatham House contrasted the Nigerian experience with that of Angola, where it said

President Jose Eduardo Dos Santos’ almost 30-year tenure had bolstered a stable central government and helped create a functional national oil company, Sonangol.

That stability had helped Angola emerge as the second-largest supplier of oil to China last year and helped the African country secure at least $13 billion in oil-backed loans from Beijing to help finance essential post-war reconstruction.

"While Nigeria was playing politics with its Asian partners, Angola was driven by economic necessity to quickly access funds to finance its reconstruction," the report said.

Unlike Nigeria, Angola, which has become Africa’s second biggest producer of oil and now rivals the Nigerians, ensured that commitments made by Asian oil companies were honored.

"Politically it wanted to demonstrate to the Angolan people that it could in peacetime deliver development, particularly ahead of the 2008 parliamentary elections," it said.