LONDON (MarketWatch) -- Nigeria is in negotiations with several oil companies including state-run firms from Venezuela and Iran, about building two refineries that will cost a total of at least $6 billion, Nigerian Oil Minister Edmund Daukoru said Thursday.

"Iran and Venezuela are involved in these discussions. There are also majors (international oil companies) Total, Shell, and Chevron," Daukoru said in a telephone interview from Nigeria.

The capacities of each refinery may be around 200,000 barrels, he said.

"We are at early stage ... We also have to get around the domestic situation. We have price caps here in Nigeria on diesel and gasoline and, obviously, that's a concern to investors," Daukoru said.

India, which has already been looking at other energy investments in the West African nation, is also looking at the possibility of taking stakes in the refineries, he added.

U.S. oil major Chevron Corp. (CVX), Anglo-Dutch Royal Dutch Shell PLC (RDSB.LN) and France's Total SA (TOT) are also considering investment stakes in the projects, Daukoru said.

The negotiations also entail discussions with some of the companies about building production facilities to convert cassava, a root vegetable that is a staple food in Nigeria, into ethanol.

Nigeria has long had insufficient crude refining capacity to meet domestic demand, forcing it to spend hundreds of millions of dollars a year on importing refined oil products.

"We're hoping to have a decision by the end of the year (on who will build the refineries and when)...but it depends on how we resolve the domestic situation (with price caps)," he said.

The West African country's four state-run refineries have for years operated at reduced capacity, often at around half, because of poor management and maintenance and sabotage.

Nigeria has tried to boost its refining capacity by requiring companies bidding in some of the country's recent oil exploration rounds to also invest in refineries.

Daukoru said he expected to announce in coming weeks a formal date for the country's next bidding round on oil exploration blocks.

The round will involve at least 20 onshore and offshore blocks, Daukoru said. In January, he said Nigeria planned a bidding round involving up to 60 oil blocks and also said talks were underway with India's state-run NTPC Ltd. on a deal involving a new power plant and Nigerian supplies of liquefied natural gas to India.

Nigeria's oil production in January averaged 2.1 million barrels a day, down from December, Daukoru said, without elaborating.

Nigeria produced about 2.25 million b/d in December, according to OPEC's monthly oil market report released in January.

Many energy analysts have questioned Nigeria's adherence to OPEC's two production cut decisions totaling 1.7 million b/d. Nigeria's total portion of those agreed-upon reductions is 142,000 b/d.