BusinessDay

Oil in northern Nigeria to produce 50,000 bpd, attracts $3bn investment

President Muhammadu Buhari on Tuesday flagged off the oil exploration of the Kolmani Integrated Development Project in the North-East, which has attracted over $3 billion in foreign direct investment with the potential of producing 50,000 barrels per day.

The Flag-off Ceremony of the Kolmani Integrated Development Project, a fully integrated in-situ development project comprise of upstream production, oil refining, power generation and fertilizer.

Buhari said, “The oil exploration at the Kolmani River located between Gombe and Bauchi states has already attracted over $3bn foreign direct investment and will boost Nigeria’s fortunes and earnings.

“The project is expected to start with a daily production of about 50,000 barrels of crude oil.”

He also said over 1 billion barrels of oil reserves and 500 billion cubic feet of gas were discovered within the Kolmani area and the huge potential for more deposits as we intensify exploration efforts.

The event was attended by Senate President, Ahmad Lawan, Bola Tinubu, the presidential candidate of the All-Progressives Congress (APC), Timipre Sylva, minister of state for petroleum resources and Mele Kyari, group chief executive officer, Nigerian National Petroleum Company (NNPC) Limited.

Others include Bala Mohammed governor of Bauchi, Inuwa Yahaya, governor of Gombe, Simon Lalong governor of Plateau and Shehu Mai-Borno, the group managing director of the New Nigeria Development Company.

Read also: Oil quest in Northern Nigeria to set off 13% derivation demand

The NNPC had in 2019 announced the discovery of crude oil in the Kolmani River region at the border community between the Bauchi and Gombe states.

Section 9 of the Petroleum Industry Act (PIA) signed by the President established the Frontier Exploration Fund (FEF) with the allocation of 30 percent of the profit from NNPC’s upstream oil and gas contracts for the purpose of oil exploration in Kolmani as well as Anambra, Dahomey, Bida, Chad and Benue Trough.

According to Buhari, considering the landlocked location and the huge capital requirement, the economics of the project is a challenging proposition.

He said, “From the outset, I instructed NNPC Limited to utilise and leverage its vast asset portfolio across all corridors of its operations to 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 to attract investment of over $3 billion to this project.”

While commending NNPC and her partners for the successful discovery of oil and gas in the Kolmani River Field, Buhari said the huge investment the project had attracted will surely be a reference subject for 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 also said the benefits the project brings to the country include energy security, financial security as well as the overall socio-economic development of the country.

President Buhari affirmed that his administration’s charge to NNPCL to explore other Oil and Gas fields beyond the Niger Delta Basins has finally yielded commendable results.

According to Buhari, this is indeed significant considering that, efforts to find commercial oil and gas outside the established Niger Delta Basin were attempted for many years without the desired outcomes.

He also said the successful discovery of the Kolmani oil and gas field by NNPC and her partners has finally broken the jinx by the confirmation of huge commercial deposits of hydrocarbons in the Kolmani River field.

“This discovery had emanated from our charge to the NNPC to re-strategize and expand its oil and gas exploration footprints to the frontier basins of Anambra, Dahomey, Sokoto, Benue trough, Chad and Bida Basins. Similar activities across the other basins are currently actively ongoing,” he said.

“We are pleased with the current discovery of over 1 billion barrels of oil reserves and 500 billion cubic feet of gas within the Kolmani area and the huge potential for more deposits as we intensify exploration efforts.”

Looking forward to the successful delivery of the Project which he called “another vital pillar in the Country’s economic architecture,” President Buhari urged NNPC and partners to work with all stakeholders for the smooth execution of the project.

He said, “I have engaged the Governors of Bauchi and Gombe States, and both have given me assurances of their unwavering commitment and willingness to ensure support and cooperation in these localities as this activity affects the local populations.

“I urge the NNPC and NNDC, and their Strategic partners to ensure all lessons learnt from our years of experience as an oil-producing nation are utilized to ensure harmonious relationship with the local communities.”

In his remarks, Timipre who recalled his relationship with the project expressed his delight to be associated with the project as Minister having worked with a former minister of petroleum resources when NNDC won the oil prospect lease being flagged off Tuesday.

Also speaking at the event, Kyari said the search for oil and gas in the frontier basins of Chad, Sokoto, Anambra Platform, Calabar Embarkment, Benue Trough, Dahomey, Bida and the Ultra-Deepwater Niger Delta had spanned decades without significant outcomes.

“The singular determination of Buhari to ensure optimum exploration and exploitation of our natural resources and your Excellency’s consequential directives for NNPC Limited to strategies and utilise available human, technological and other material resources to prosecute exploration activities in all Frontier Basins resulted in the discovery of commercial oil and gas deposits in the Kolmani Prospect in April 2019,” Kyari added.

There were also goodwill messages from governors of Bauchi, Gombe, Plateau state, the chairman northern governor’s forum and Tinubu.

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