Finally, 2 northern states join the elite oil producing club

Like dream like dream, like play like play, prospecting for oil in the desert North-east states of Bauchi and Gombe has become a stark reality. Tuesday, November 22, 2022, was the day President Muhammadu Buhari officially flagged off oil activities at Kolmani River site, better referred to as Kolmani Integrated Development Project.

Kolmani field is located in Barambu village in Alkaleri Local Government Area of Bauchi state which borders Gombe state.

Most Nigerians see this development as very positive to the country’s economic development.

Kolmani oil field has proudly broken the jinx by the confirmation of huge commercial quantities as efforts to find commercial oil and gas outside the established Niger Delta Basin for many years without the desired outcomes.

President Buhari himself, speaking at the flag-off, did reaffirm that his administration’s charge to Nigerian National Petroleum Company Limited (NNPCL) to explore other oil and gas fields beyond the Niger Delta Basins has finally yielded commendable results.

President Buhari had advised NNPCL to avoid a repeat of the Niger Delta experience in the North in the case of the Kolmani Integrated Development Project (KIPRO) of the Gongola Basin.

The president listed the pitfalls to include, among others, environmental degradation, communal crises and youth restiveness.

He said they must not allow the circumstances that created unpleasant experiences in the country’s oil production activities while urging stakeholders in the multi-billion dollar business to follow the path of harmonious relationships with local communities.

According to PMB, “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 potential for more deposits as we intensify exploration efforts”. He added that it is good to note that the discovery has now attracted investments for an end-to-end integrated development and monetisation of the hydrocarbon resources in the area for the good of the country.

“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 these activities affect the local populations.”

It is believed that the over one billion barrels of crude in oil reserves could significantly raise Nigeria’s oil reserve which has not grown in 10 years.

To make it easier for the venture to succeed, the president said he had instructed the NNPCL to harness all available resources within its control to ‘de-risk’ the project.

Indeed the exploratory drilling activity was flagged off in 2019, a result of which was the confirmation of existence of hydrocarbon in commercial quantities which include crude oil, condensate and natural gas, thus leading to the decision to develop the field by the PMB administration.

Although exploration started over 30 years ago, it was however halted under mysterious circumstances and for reasons not too clear to most Nigerians.

The journey to the epoch making event commenced in the
1990s when Oil Prospecting License
(OPLs) 809 and 810 were initially
awarded to Shell and Chevron,
respectively, as part of their frontier
obligation under the Production
Sharing Contract, PSC.
Agreement on Oil Mining License
(OMLs)118 and 132 for consolidated
cost recovery. But both companies
reported sub-commercial discovery
of hydrocarbon in their books.

Beyond the sub commercial
Oil Prospecting Licence, OPL 809 and 810 Kolmani field were held by Northern Nigeria Development Company NNDC, the umbrella investment company for the 19 northern states in partnership with NNPC Ltd in a Production Sharing Contract, PSC.

For the avoidance of doubt it is important that mention be made.of the most basic activities embedded in the project at a remote village at the borders of Bauchi and Gombe states in the North East Region of the country. Such activities include drilling of additional appraisal wells to further ascertain quantum of the reserve, which experts say is presently put at 1 billion barrels, oil refinery, building of 500 billions cubic feet of gas processing plant, building of a 150mw power plant and 2,500mt per day of fertilizer production, among others.

Other high profile benefits the project brings to the country include Energy Security, Financial Security as well as overall socio- economic development of the country.

President Buhari has declared that his administration attracted over $3bn investment in the Oil and Gas Sector at a time of near-zero appetite for investment in fossil energy.

According to experts exposed to geophysics, many northern states are sitting on hydrocarbon while in Gudu area of Sokoto state there are unconfirmed reports that the area is also rich in oil. Also, other States are said to be rich in uranium and gold among others.

Community leaders and residents of Bauchi and Gombe states have called for job opportunities and a roadmap to a cleaner environment which they described as a new dawn in their lives, but cautioned the President and other stakeholders to ensure their communities were not sidelined in terms of recruitment, decision-making, compensation and other opportunities.

There is no exaggerating the fact that a new lease of life has began for the host community, the North and indeed the whole country for this unimagined milestone.

Ilallah writes from Abuja.

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