Orient Energy Review

Nigeria Confirms Oil Discovery In Gongola Basin

The Nigerian National Petroleum Corporation, NNPC, has launched a tender process for fuel supplies in the country. It stated that this falls under the NNPC’s direct sale-direct purchase (DSDP) mechanism. Under this system, NNPC will provide monthly crude oil free on board (FOB) cargoes to suppliers, who shall provide petroleum products in return. In the process, companies must register interest by December 22 at 12 noon for the 2020-21 DSDP process. Documents should be submitted by January 21 and NNPC will open these bids online. The products will be on a delivered at place (DAP) basis, to designated ports in Nigeria. The fuel shall be equivalent in value to the crude oil received from NNPC. Under the ongoing process, three different types of company can participate, and they are Foreign refinery owners capable of processing Nigerian crudes, with a Nigerian affiliate or subsidiary. Also, Globally established traders, with Nigerian affiliates or subsidiaries and indigenous companies working in the downstream with trading expertise are qualified to bid. The DSDP contract will run for 12 months, starting at a yet to be revealed time. Bidders must demonstrate they meet various standards, such as audited accounts and minimum turnover thresholds. They must also meet Nigerian content requirements. The NNPC began the DSDP process in 2016 and expects to continue this until 2023. The Corporation awarded the last round of DSDP contracts in August 2019 and was due to expire in September 2020. However, these 2019-20 DSDP awards were extended by six months. Around 130 companies submitted bids in 2019, with 15 winning bids accepted. These included BP, Vitol, Gunvor and Trafigura, in addition to some local companies such as Sahara Energy and MRS Oil and Gas. NNPC included its own Duke Oil unit in the list of 15.

Nigeria confirms oil discovery in Gongola Basin

The prolonged search for oil in the North-Eastern part of Nigeria has paid off with the announcement last weekend by the Nigerian National Petroleum Corporation (NNPC) of the discovery of hydrocarbon deposits in the Kolmani River II Well on the Upper Benue Trough, Gongola Basin.

The groundbreaking ceremony for the oil search in of Kolmani River II Well, in Gongola Basin, was performed by President Muhammadu Buhari last February alongside senior management staff of the NNPC. The event, according to the President, will open the country’s new quest for commercial hydrocarbon deposits in its inland basins

The NNPC had acquired 435.54km2 of 3D Seismic Data over Kolmani prospect in the Upper Benue Trough, Gongola Basin as part of its efforts to evaluate Shell Nigeria Exploration and Production Company (SNEPCo) Kolmani River 1 Well Discovery of 33 BCF and explore deeper levels. The national corporation said in a statement that the well was drilled with “IKENGA RIG 101” to a total depth of 13,701feet encountering oil and gas in several levels.

NNPC, however, said that a Drill Stem Test (DST) is currently on-going to confirm the commercial viability and flow of the Kolmani River reservoirs. It stated that exactly “on Thursday, October 10, 2019, one of the reservoirs were perforated and hydrocarbon started flowing to the wellhead at 21:20hours in which the gas component was flared to prevent air charge around the Rig.”

The discovery consists of gas, condensate and light sweet oil of API gravity ranging from 38 to 41 found in stacked siliciclastic cretaceous reservoirs of Yolde, Bima Sandstone and Pre-Bima formations. Computation of hydrocarbon volume is on-going and will be announced in due course, NNPC said

“The Corporation has also acquired additional 1183km2 of 3D seismic data over highly prospective areas of Gongola Basin with a view to evaluating the full hydrocarbon potential of the Basin. NNPC has deployed world class cutting-edge technologies including surface geochemistry, ground gravity/magnetic, stress field detection, full tensor gradiometry aerial surveys to de-risk exploration in the frontier basins.

“The NNPC plans to drill additional wells for full evaluation of the hydrocarbon volume in the Gongola Basin”, NNPC said, adding that attention would henceforth be given to the Dahomey and Anambra Basins, which have already witnessed oil and gas discoveries.

The discovery of oil and gas in commercial quantity in the Gongola Basin will attract foreign investment, generate employment for people to earn income and increase government revenues.

During the spud-in ceremony, the President has also promised that his administration will explore oil and gas in the Benue Trough, Chad Basin, Sokoto and Bida frontier basins in of the country.

Chibisi Ohakah