• PETAN Eyes 200 Billion Barrels Oil Reserves From Further Exploration
• Insecurity, Climate Change, Regulatory Lapses May Frustrate Investment
Insecurity, energy transition, looming environmental dangers, investment apathy, cloudy regulatory framework, diversion of funds to the North and other unanswered questions top the list of worries, as stakeholders in the energy sector expressed divided opinion over the discovery of one billion barrels of oil in the North East.
While some stakeholders expressed satisfaction over the development, stressing that it would drastically improve the nation’s revenue, increase employment opportunities, diversify hydrocarbon base, create industrial hub, as well as enable the country to increase its reserve to 40 billion barrels, and daily oil production to three million barrels, others were cynical, noting that the discovery could be mired in politics.
The Minister of State for Petroleum Resources, Timipre Sylva, who spoke in Abuja, last Thursday, said over one billion barrels of oil has been discovered in the northeastern part of the country, adding that the exact figure was being ascertained.
“From the evaluation results that we are getting, the reserve that has been discovered in the North East is about a billion barrels. Those are the kinds of figures that we are seeing, and we are beginning to understand the geological structure of the region,” the minister stated.
Believed to be President Muhammadu Buhari’s pet project considering that he started the agitation over 40 years ago, the Nigerian National Petroleum Corporation (NNPC) late last year announced the discovery of hydrocarbon deposits in the Kolmani River II Well, on the Upper Benue Trough, Gongola Basin, and also informed that it was working to estimate the findings.
The Chairman/Chief Executive Officer of IESL, Dr. Diran Fawibe, who lauded the development said there was need for the country to move fast and explore available options or face looming decline in crude oil prices.
Fawibe, a former top management staff at the NNPC stated that the country was endowed with oil resources that are yet to be discovered, adding that there was the need to intensify efforts on oil exploration, especially by addressing challenges that would encourage international oil companies and other investors to explore hydrocarbon across the country.
According to him, there is need for the establishment of a good investor-friendly environment, particularly good fiscal regime and the passage of the Petroleum Industry Bill.Fawibe said the current development would diversify the nation’s resources base, increase revenue, and create energy security in the North.
Unless security challenges in the region are properly addressed, the discoveries and further exploration may remain elusive, he noted.
While crude oil is usually export oriented, which could justify the need to invest in infrastructure, the closest export terminal to North East is in the Republic of Cameroon and currently operating at full capacity, thereby requiring synergy between Nigeria and Cameroon, as well as other stakeholders to expand the facility should Nigeria target to export the discovered crude.
At a time when the country is focusing on reducing the cost of production of a barrel of oil, some stakeholders are equally worried about the possible cost of producing oil at a difficult geological terrain, even as the cost of transporting products by trains is being considered.
While oil discovery in the North would create a level of energy independence in the region, analysts are skeptical on the geo-politics, stressing that it was not celebration time yet, but a time for further interrogation.With reliable sources disclosing that over $200m has already been staked in pursuing oil deposits in the northern region, some analysts are of the opinion that more resources still need to be committed into the region, even though the NNPC has not been transparent in the funding these exploration activities.
Some analysts have also called for the need to allow international oil companies into the region, to ensure that reports coming from the Federal Government are corroborated. Chairman of the Petroleum Technologists Association of Nigeria (PETAN), Bank-Anthony Okoroafor said the oil find was commendable since it was coming from a different geology from what has been known.
“We have always preached for more exploration to uncover more reserves. I belief our reserves should be above 200 billion barrels if we continue supporting exploration activities,” he said.Okoroafor lauded the NNPC and the government for their doggedness in exploring oil in the North, while stressing the need to be persistent in all frontier basins so as to fully explore our hydrocarbon prospects.
On his part, the Managing Director, Oildata Energy Group, Emeka Ene, said oil discovery in the North presents the opportunity to develop an alternative hydrocarbon basin outside of the Niger Delta.Ene said: “However, going from discovery to appraisal, to field development takes time and money, and the appetite for investment in our oil industry is waning in the absence of the enabling legislation.
“The PIB needs to be prioritised. The rest of the world is moving on and the cost of doing business in our country, with security concerns and inefficiencies in the system, are amplified with continued uncertainty in fiscal terms.”Team Lead (Research and Policy), Nextier SPD, Dr. Ndubisi Nwokolo, however, noted uncertainties in the development, especially with the current security challenges in the country.
He said while the announcement failed to specify where the discovery was made, he noted that if the reserve is in the Lake Chad region, and around the end of Borno State, there may be no tendency for an immediate exploration judging by the height of the insurgency in that part of the region.“However, if this is between Bauchi and Gombe, although issues of kidnappings and banditry are still on, while in other parts of the country especially the northern region, it could be managed for an exploration to start,” he said.