Nigeria has agreed to give China four oil drilling licenses in exchange for a promised $4 billion investment in Nigeria's infrastructure.
Nigerian officials announced the deal Wednesday as China's President Hu Jintao began a two-day visit to Nigeria as part of his African tour.
Under terms of the deal, Nigeria will give China's National Petroleum Company the first right of refusal on four exploration blocks at an auction next month.
Two of the blocks are located in Nigeria's oil-producing Niger Delta region, while two others are in the largely unexplored Lake Chad basin.
Mr. Hu is expected to sign the deal at a ceremony Wednesday with Nigerian President Olusegun Obasanjo.
The Chinese president's African tour is aimed at obtaining more oil and opening new markets for China's booming economy.
China recently purchased a major share in an offshore Nigerian oilfield.
Mr. Hu is scheduled to address Nigeria's parliament before traveling to Kenya on Friday.
Earlier this week, the Chinese president was in Morocco, where he signed agreements on trade, science, culture and health care.
Some information for this report was provided by Reuters.