Nigeria made history yesterday as it officially kicked off the drilling of crude oil in the northern part of the country 63 years after the natural resource was first drilled in Oloibiri, Bayelsa State.
President Muhammadu Buhari officially inaugurated the commercial production of crude oil and gas from the Kolmani Integrated Development Project (KIPRO).
Located along the fields of Gombe and Bauchi, the Kolmani project, with Oil Prospecting Licence 809 and 810, lies in the Gongola Basin of the Upper Benue Trough, straddling the two Northern states.
With this Nigeria is expected to tap into the one billion barrels of crude oil from the first reservoir of the Kolmani oil fields and oil exploration could reach 19 billion barrels of crude with the discovery of more reservoirs.
The country will also reap over 500 billion standard cubic feet of gas from the first reservoir with prospects for higher volumes of gas.
The field, according to its promoters, is to start producing about 50,000 barrels of crude oil per day and holds over one billion barrels of crude oil reserves, shooting up Nigeria’s oil reserves to over 38 billion barrels.
In his address at the event, Buhari said the facility attracted $3bn worth of investments despite the lack of appetite in the oil sector.
He said, “Considering the land-locked location and the huge capital requirement, the economics of the project is a challenging proposition.
“Consequently, from the onset, I instructed NNPC (Nigerian National Petroleum Company) Limited to utilise and leverage their vast asset portfolio across all corridors of its operations to de-risk the project to attract the much-needed investment. I have directed NNPC to continue along these lines.
“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 $3bn to this project.”
Buhari described the ceremony as important in the economic history of Nigeria, “as we move closer to production of oil and gas in the Upper Benue Trough, specifically, the Kolmani River oil and gas field, straddling Bauchi and Gombe states.”
The event was attended by the minister of state for Petroleum Resources, Timipre Sylva; board chairman, NNPC Ltd, Margery Chuba Okadigbo; group chief executive officer, NNPC Ltd, Mele Kyari; governor of Bauchi State, Bala Mohammed; governor of Gombe State, Muhammad Inuwa and governor of Plateau State, Simon Lalong.
Also in attendance is the president of the Senate, Ahmad Lawan; the presidential candidate of the All Progressives Congress, Asiwaju Bola Ahmed Tinubu; group managing director of NNDC, Shehu Usman Mai-Borno and the MD SEEPCO Limited, Mr. Mohit Barot, among others.
Buhari said that the discovery of crude oil in the region was vital as it would help to guarantee energy, financial, and food security for Nigeria.
He added that through the project, the economic development of the country through investments that will be attracted into the sector will be accelerated.
In his remarks, minister of state for Petroleum Resources, Timipre Sylva said the commencement of drilling of Kolmani fields will significantly contribute in boosting the country’s oil reserves and ensuring its continuous energy sufficiency
“One of the key mandates of the Ministry of Petroleum Resources is to grow reserves from the current 37 billion barrels of oil to 40 billion barrels of oil by 2025. The Petroleum Industry Act (PIA) 2021 provided the regulatory support and framework for achieving this mandate by providing for the Frontier Exploration Fund which the NNPC can utilise to deploy world class cutting-edge technologies to de-risk exploration in the frontier basins,” he said.
The group chief executive officer of NNPC, Mele Kyari said: “There are certainly more discoveries to be made if exploration activities continue. Again, we are confident that the current efforts of the administration will lead to improved security in the northeast”.
Mele Kyari praised the support of the 19 northern state governors to the NNPC throughout the journey to the discovery.
Speaking, Bauchi State governor, Bala Mohammed allayed fears of possible border tension between Gombe and Bauchi states over ownership right of the Kolmani River II Oil Field.
He said the two states have shared a common identity since generations, adding that Gombe State was carved out from Bauchi State and the people of both states remain connected through shared family ties, hence no room for violence.
“The discovery of oil in any of our communities will be for the benefit of us all. We, as a government, are already investing in these areas to create a sense of belonging and government presence, and reduce poverty and unemployment.
“The experiences we have had from Niger Delta and other communities show the importance of collaboration, community engagement, environmental protection, mutual respect, and fairness in preventing conflict and violence that are often associated with the exploration of mineral resources.
“I want to assure you that we will put in place mechanisms that will prevent the repeat of some of the past mistakes. Oil and Gas exploration falls under the exclusive jurisdiction of the Federal Government. As stated, we will provide the needed support,” he said.
The governor called on President Buhari to complete the construction of a road linking the oil exploration field to the outside world for ease of access and allow room for the inflow of investment into Bauchi State.
Oil Drilling In North To Drive New Investment, Job Creation – Experts
Stakeholders in the oil and gas industry have said oil drilling in the North is expected to drive new investment and job creation.
President Muhammadu Buhari flagged off the validation phase of the first integrated oil development project in northern Nigeria yesterday.
Reacting to the development, chairman/CEO of Integrated Oil and Gas, Emmanuel Iheanacho, said the country stands to benefit from this as it will help the country to meet its OPEC quota and restore its position as top oil producer in the continent.
Iheanacho, who spoke with LEADERSHIP on the issue, said the president had taken the right decision to further deepen investment in the sector.
“I see this as a welcome development and so long as seismic report shows the oil is in commercial quantity in those assets, it will go a long way to benefit the nation economically.
“It is our natural resource and I support every effort aimed at advancing the economy and providing more foreign exchange for the country,” Iheanacho, who is a former minister of Interior, said.
On his part, the chief executive officer, Centre for the Promotion Of Private Enterprises(CPPE), Dr. Muda Yusuf, said the political will of the president to commence oil drilling in the north should be applauded.
Yusuf, who was the former director general of the Lagos Chamber of Commerce and Industry (LCCI), said the move will create more job opportunities in the country because it will drive new investments and also generate more foreign exchange.
He urged the federal government to initiate fresh moves to address insecurity which could pose a threat to the investment.
“I think one thing this will bring about is a new security initiative as widening insecurity is threatening investment across the entire energy sector. So, I want to challenge government to draw a new security plan to safeguard expected investment from this initiative,” he said.
The managing director of Lancelot Ventures Limited, Mr Adebayo Adeleke, wished the country good luck in its oil exploration in the North. He however said nobody should get excited over drilling activity in Bauchi State, saying “it is one thing for them to have seismological reports that show the essence of oil and another thing for them to strike oil and in large commercial quantity.
“This is something that should not warrant too much excitement. Nigeria has been drilling oil in Lake Chad Basin for years, we have not found oil in commercial quantity. This is a place that there is more likelihood for finding oil than Bauchi.”
Adeleke added that “if there is oil in Bauchi, we hope it is in large commercial quantity; otherwise, the exercise is fruitless, which will have resulted in huge investment and in case there is not enough oil, the earth will have to be refilled, which is another waste of resources.”
He also noted that “if there is oil, we have issue about piping it. Since there is no sea in Bauchi, we have to lay pipe from Bauchi to the coastal region. We have three refineries in the South, one in Warri and two in Port Harcourt, with pipe laid across Nigeria, yet we cannot afford to pump oil from the South to the North because of vandalisation. We have not overcome this problem and how can we overcome the same problem if we have to start pumping from Bauchi down to the coastal region.”
He stated that if the country is able to overcome these challenges, this will be a good development and increase the economy of the country by boosting income.
The managing director of APT Securities and Funds Limited, Mallam Kurifi Garuba said the exploration of crude oil is a blessing to the community, the state and to the nation in general,
He said, “We have refinery in Kaduna and our challenge will be how to transport crude oil from Bauchi to the ocean, from the seaport down to Kaduna. The distance is not far from Bauchi to Kaduna and this will activate the Kaduna refinery to start blending and this will be a win-win situation”.
