* Elumelu has committed $2.5 bln to Obama Africa power plan
* In talks with majors to buy two large onshore oil blocks
By Tim Cocks
LAGOS, July 15 (Reuters) - Nigerian businessman Tony Elumeluis negotiating with several oil majors to buy two onshore oiland gas assets he will use to fire power plants that are part ofhis $2.5 billion investment pledge to U.S. President BarackObama's Africa Power initiative.
"I just came back from Europe yesterday and we are talkingvery seriously with all of the oil majors to buy two big oilfields," Elumelu said in an interview at his office in Lagos.
Several oil majors, including Chevron, Royal DutchShell, Petrobras and ConocoPhillips are expected to this year divest multiple assets onshore or inthe shallow waters of the Niger Delta, continuing a trend thatstarted two years ago.
Elumelu, a former banker credited with transforming UnitedBank for Africa from an ailing local lender into apan-African behemoth, is building, buying or renovating up tofive power plants in Nigeria, through investment fund HeirsHoldings.
His plans are a key part of the government's move to get itsdecrepit power sector into private hands and end chronic powershortages seen as the main break on Africa's second biggesteconomy.
But investors are wary of potential problems such as thereliability of gas, the transmission of what they produce -which will remain in state hands - and ensuring payment for thepower, as well as disruptive unions.
Elumelu already counts two oil blocks among his interests.
"Our two oil blocks have huge gas supply, which we intend touse to produce power. We have more than enough to supply ourcurrent plans," he said, but added that seeking a further twowould enable him to have even more.
ASSURED DEMAND FOR POWER
When Obama unveiled a $7 billion Africa Power initiativethis month, private sector leaders matched it with $9 billion ofcommitments. Elumelu pledged $2.5 billion.
Despite being the continent's top oil producer and holdingthe world's ninth largest gas reserves, Nigeria's power outputis a tenth of South Africa's for a population triple the size.
"It's the one sector where demand is certainly assured.Everything you produce ... will be taken off you," he said,estimating it at 70,000 - 100,000 megawatts, against the 4,000mw currently produced.
"The beauty of the privatisation is that once the privatesector mentality is in the value chain, they will put pressureon the government to make sure it works," he said.
Heirs Holdings has about $300 million invested in Nigeria'spower sector through its Transnational Corporation of Nigeria(Transcorp). Earlier this year it bought a Nigerian power plantand it is aiming to raise its output to 1,000 megawatts.
Elumelu said he was also planning to spend $700 million inrefurbishing another power plant, and was bidding for at leastone of 10 new gas fired plants that the government put up forauction last month.
Though most of his power investments would be in Nigeria,Elumelu said he was also looking at Tanzania, where he hasalready bought farmland, as a possible site for power projects. (Editing by James Jukwey)
