Oil drilling begins in Gombe, Bauchi of Nigeria with 1b barrels oil, 500bscf gas

Sixty-six years after crude oil discovery in Nigeria,

President Muhammadu Buhari, yesterday, officially flagged off the

anticipated drilling of crude oil at the Kolmani field, which is lapping

on the border of Bauchi and Gombe states.

The first phase of the exploration will entail an in-situ oil

refinery of up to 120,000 barrels per day capacity, a gas processing

plant of about 500 million standard cubic feet per day, a power plant of

up to 300-megawatt capacity and a fertiliser plant of 2,500 tons per

day, according to the Nigerian National Petroleum Company (NNPC)

Limited.

President Buhari said one billion barrels of crude oil reserves and

500 billion standard cubic feet of gas exists in Kolmani River Oil and

Gas Field. He further declared that his administration has attracted

over $3 billion in the oil and gas sector at a time of near-zero

appetite for investment in fossil energy.

By the announcement, the President became the second person to put a

figure to the oil finds after the nations petroleum industry was thrown

into divergent views when the Minister of State for Petroleum

Resources, Timipre Sylva, first mentioned the figure about two years

ago.

Speaking at the official groundbreaking ceremony of the Kolmani Oil

Prospecting Licenses (OPLs) 809 and 810 at the Kolmani field site in

Gongola basin, President Buhari said the development remained

significant considering that, efforts to find commercial oil and gas

outside the established Niger Delta Basin was attempted for many years

without the desired outcomes.

According to him, the successful discovery of the Kolmani Oil and Gas

field by NNPC and her partners has broke the jinx with the confirmation

of huge commercial deposits of hydrocarbons in Kolmani River field.

We are pleased with the current discovery of over one billion

barrels of oil reserves and 500 billion Cubic Feet of Gas within the

Kolmani area and the huge potentials for more deposits as we intensify

exploration efforts.

It is good to note that the discovery has now attracted investment

for an end-to-end integrated development and monetisation of the

hydrocarbon resources, President Buhari, who doubles as the Petroleum

Minister, said.

He added that upstream production, oil refining, power generation and fertiliser are anticipated at the region.

Admitting that the land locked location will create huge capital

requirement, making the economics of the project a challenging

proposition, the President said NNPC would de-risk the project to

attract the much-needed investment.

It is, therefore, to the credit of this administration that at a

time when there is near zero appetite for investment in fossil energy,

coupled with the location challenges, we are able attract investment of

over $3 billion to this project.

This will surely be a reference subject for favourable discussion in

the industry as we pursue the just energy transition programme that

will culminate in our country achieving Net-Zero position by the year

2060, he said.

Sylva noted that drilling for hydrocarbons at the Upper Benue

Trough/Gongola Basin, remain crucial to the nations survival, adding

that it is a pathway to energy transition.

We recognise that reduction in fossil fuel revenue, without

sufficient time and support to manage macroeconomic risks and the

structural transformation required to build a diversified, sustainable

and resilient economy, will have catastrophic social knock-on effects

for millions of people in Nigeria and this cannot be allowed to happen.

The risks arising from our current challenges of energy poverty,

lack of access to clean cooking fuel, insecurity and unemployment are

pervasive across the country, but so is the value proposition to all

stakeholders. The reward of getting it right is so huge that we have no

option but to stay the course and see it through. This is why I welcome

the collaboration between NNPC Limited and its partners in this

campaign, and look forward to the expansion of these partnerships with

respect to other basins, which will give us a fighting chance to address

the myriad of issues that confront us, Sylva said.

According to him, the new development has enabled Nigeria to redraw

its hydrocarbon map to include a region, which was once the subject of

speculative optimism, crystallising instead into definitive prospects.

Group Chief Executive Officer of NNPC Limited, Mele Kyari, said the

commercial discovery at Kolmani River was a testament to the order of

the President that forced NNPC to re-strategise and eventually make

history at the location.

He said the company has launched search across the in-land basins on

the backdrop of improved security situation, including in the Chad

basin.

BUT the Senate President, Ahmed Lawan, advocated for the review of

the Constitution to include the utilisation of the statutory 13 per cent

derivation for oil producing states. Lawan said he is worried over

what has been happening in the Niger Delta Development Commission

(NDDC) with the 13 per cent derivation or maybe the application or

misapplication of the resources of NDDC. This is something the new oil

bearing states should learn from.

On 13 per cent derivation, I think we should have a constitutional

review on how you apply the derivation. Thats the reason why we have to

go for three per cent to host community development. I believe that the

host communities here will soon see a lot of activities and will also

deserve more resources for their development. I, therefore, advocate

that not only the Community Development Funds, even the 13 per cent in

the Constitution should have serious bearing on the lives of host

communities that bear the brunt of oil exploration.

He called for urgent diversification of the nations economy. While

we are getting the resources from oil, we should be thinking of

developing other sectors where our people can be gainfully employed, he

said.

Also, Bauchi State governor, Bala Mohammed, said the state would

maintain a peaceful and harmonious environment to ensure that investors

have freedom to operate for the benefit of the two states, investors and

the nation at large.

His counterpart in Gombe, Governor Inuwa Yahaya, applauded the

President for assenting to the Petroleum Industry Act (PIA), which he

said suffered delay for more than 13 years at the National Assembly. He

called on the President to extend the exploration to the Lake Chad basin

for further development of the Northeast region.

According to Gombe State government, the oil well will be contributing to the countrys three million daily capacity in 2030.

President Buharis visit to the oil field was an on-the-spot

assessment towards laying to rest the controversy over ownership as

claimed by both Bauchi and Gombe governments.

Recall that the President once invited the governors and officials of

NNPC to London for an enduring resolution, which sources said informed

yesterdays official ground-breaking.

MEANWHILE, presidential candidate of the ruling All Progressives

Congress (APC), Asiwaju Bola Tinubu, has pledged to sustain the project

if elected president in 2023. He said the President has made history

after over 60 years of Nigerias oil exploration.

The former Lagos State governor said though Nigerians may be hungry,

President Buhari has put the country on the path of prosperity. He added

that history would be kind to the President because he is a former

general who came to rescue his country when things were gloomy.

Whatever they say in their social media, traditional comments and

write-ups, history will be very kind to you because you are in the class

of great retired generals who came to rescue their country, Tinubu

said.

We may be hungry but we can manage our hunger; we dont want to kill

each other. Today, you gave us a path to prosperity, a path to success.

The only thing that I may want to exclude and argue about is the West

and Europe. They use our coal and fuel to develop their economy and they

ask us to be conscious, but I like your answer.

We cannot stay hungry and starve to death. We have to take care of

ourselves unless they pay compensation to us; that is where we stand.

The presidential candidate said if elected into office, he would

ensure that Lake Chad is “recharged” as a means of tackling hunger and

insurgency.