Oil in the North: Uncertainty trail FG’s one billion barrels claim

Experts insist discovery political, elusive
…Stakeholders raise alarm over renewal of two OPLs

A year after the discovery of crude oil in the North, the Federal Government and the Nigerian National Petroleum Corporation (NNPC) Limited are yet to come clean on the true state of activities in the nation’s inland basins.

Unanswered questions top the list of doubts and concerns, as stakeholders in the energy sector expressed divided opinions over the discovery of one billion barrels of crude oil in the North-East region.

While some stakeholders expressed satisfaction over the development, stressing that it would drastically improve the nation’s revenue, increase employment opportunities, diversify its hydrocarbon base, create an industrial hub as well as enable the country to increase its reserve to 40 bn barrels, and daily oil production to 3 mn barrels, others remain cynical, noting that the discovery could be mired in politics.

Recall that the Minister of State for Petroleum Resources, Timipre Sylva, last year said about one billion barrels of crude oil have been discovered in the North-East, adding that there was the need for more exploration to be undertaken.

Seen by many as President Muhammadu Buhari’s pet project, which he started over 40 years ago, Sylva’s announcement followed an earlier statement by the NNPC in the third quarter of 2019, which stated that crude oil, gas and condensates were discovered in the Kolmani River region, located at a border community between Bauchi and Gombe States.

That announcement was made eight months after President Buhari flagged-off exploration activities at the Kolmani River II well, on the Upper-Benue Trough, Gongola Basin, in the North-East.

However, stakeholders who spoke with newsmen have expressed concerns over the secrecy surrounding the exploration in the North, as the NNPC, which had pledged to be transparent and accountable and currently partnering the Extractive Industries Transparency Initiative, (EITI), is yet to publish its spending on the activities.

While the NNPC publishes monthly audited operational and financial reports, spending at its Frontier Exploration Services is excluded. The 40-year spending has been kept away from the public along with critical data on how the country arrived at a one billion barrel discovery in the Gongola basin.

Some geologists, explorationists and energy experts are equally raising concerns over the viability and reliability of a one billion crude oil reserve in the region as the country’s total reserves and daily production remained on the downward outlook.

There are indications that the New Nigeria Development Company Ltd, (NNDC), owned by the 19 northern States, which had in 2007 won the Oil Prospecting Licence 809 and 810 in the Gongola basin, may be operating the blocs without renewal.

Compounded by what some stakeholders described as arbitrariness in the handling of OML 11 and 17 as well as divestment by players in the sector, the prevailing development is raising fresh serious concerns over the level of opacity and poor management of the industry under the watch of President Buhari.

Amidst the declining value of crude oil and weak investment outlook, the Federal Government had insisted that exploring the frontier basin, which is mainly in the North remained sacrosanct, as 30% of the NNPC’s profit has already been earmarked for such exploration activities.

While oil majors had ventured into the basins without success, activities came on stream across basins in the North-East, especially Lake Chad and Gongola basin, as soon as Buhari returned to office but met with criticisms by stakeholders and civil society organisations. The criticisms were not primarily against prospecting for crude oil but timing, political undertones, secrecy and the general handling of the plan.

As of press time, the spokesperson of the NNPC, Garba Deen Muhammad, was yet to respond to phone calls on the matter, while an aide to the Sylva, Horatius Egua, claimed to have no information on the matter.

Request for information at the Nigerian Upstream Regulatory Commission (NURC) was yet to be provided before this report was filed.

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