For the first time in history, President Muhammadu Buhari is expected to officially kick off the drilling of crude oil in the northern part of Nigeria on Tuesday, about two years after the mineral resource was discovered in the region.
This is a major boost to the efforts by the federal government to ensure that the region produces crude oil in commercial quantities.
Specifically, the president will conduct the ground-breaking ceremony of the Kolmani Oil Prospecting Lease (OPL) 809 and 810 at the Kolmani field site located in Bauchi and Gombe states.
The president is expected to carry out the historic exercise with the support of the Minister of State for Petroleum, Mr. Timipre Sylva and the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari, among others, THISDAY gathered.
It was further learnt that the oilfields in Bauchi and Gombe states will be developed by Sterling Global Oil, New Nigeria Development Commission (NNDC) and the NNPC Limited.
“The ceremony will be held on Tuesday, November 22, and will be attended by Mr. President himself together with most of his cabinet members including the Minister of State for Petroleum, Timipre Sylva,” said an official of NNPC, who spoke off the records.
Last year, the Nigerian Petroleum Development Company (NPDC) issued a request for expressions of interest (EoI) on the development of the two licences in Nigeria’s North-east.
The integrated development of OPLs 809 and 810 in the Gongola Basin, in the Upper Benue trough extends about 1,000 km from the Bight of Benin to Lake Chad.
Before then, the NPDC said it had discovered “huge commercial quantities” of oil and gas in the Kolmani River, adding that the blocks were more than 700 km from the coast, posing challenges to export options.
It also proposed an onsite midstream refinery and power plant, saying that this would allow it to use these resources for local needs as well as “create an industrial hub” to provide economic benefits and employment.
At some point in the development of the facilities, in the midstream, the plan would involve a 150 MW power plant and a 50,000 barrel- per day condensate refinery.
The NPDC, as it was then called, had drilled the Kolmani River 2 well in 2019 and the Kolmani River 3 in early 2021.
Bauchi State Governor, Senator Bala Mohammed, had also recently said the oil and gas exploration at Kolmani River in Alkaleri Local Government Area of the state by the NNPC would ‘reverse the narrative of poverty and underdevelopment’ in the state.
NNPC Limited has over the years expended monies on frontier exploration, but the spending has now been statutorily ingrained in the new Petroleum Industry Act (PIA) 2021.
The new piece of legislation has now raised funding for frontier exploration to 30 per cent, which implies that the NNPC Limited would have more funds to develop oil fields around the country.
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria currently has crude oil reserves of about 37 billion barrels.
Kolmani fields could hold as much as one billion barrels crude oil reserve, which could significantly raise Nigeria’s oil reserve.
The oil discovery in the north is coming at a time crude oil production has dropped to around one million barrels per day in the country, as a result of oil theft and vandalism, thereby hobbling the ability of the country to earn foreign exchange.
Emmanuel Addeh in Abuja
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