In the last decade, Nigeria’s revenue from oil and gas witnessed serious decline, essentially due to large scale, internationally linked oil theft, and pipeline vandalism.

At the height of the menace, from late last year, Nigeria was forced out of the position of biggest oil producer in Africa. Today Nigeria is the fourth in the region, next to Libya, Angola, and Algeria.

OPEC’s monthly oil market report for October showed that with 1.163 million barrels per day (bpd), and a production increase of 6000bpd, Libya is unarguably the leading champion in oil production in Africa. This is not withstanding the threatening, internal problems facing the county’s political economy.

But the situation is about to change with stakeholders in the oil and gas industry submitting that Nigeria is now more forward looking in efforts to develop her natural resources.
The affirmation is coming as President Muhammadu Buhari, flagged off the validation phase of the first integrated Oil Development project in northern Nigeria on Tuesday.

The latest effort backs a recent move by the Nigerian National Petroleum Company (NNPC) Limited to reverse huge losses incurred since the beginning of the year after.
The NNPC, had successfully executed agreements for the renegotiated Production Sharing Contracts, PSC, with contractors in five Oil Mining leases.

It is projected that the deal would transform the oil and gas industry as well as unlock over $500 billion in revenue from its oil resources.
Some of the projects, which have been on for years include domestic gas development initiatives, frontier exploration, renewable energy and the Nigeria/Morocco pipeline.

However, some of these would be reversed following the company’s renewed agreements in OMLs 128, 130, 132, 133, and 138.
Industry operators have expressed confidence that the contracts would definitely unlock investment in the upstream sector and boost investors’ confidence.

Commenting on the renewed PSCs, group CEO, NNPC, Mele Kyari, said renegotiations of the assets were in line with the provisions of section 311 of the Petroleum Industry Act (PIA) 2021 with other improvements to the PSCs aimed at driving performance in the PSC operations.

Kyari said the negotiations were completed within the timeframe specified by Petroleum Industry Act, PIA for all re-negotiated PSCs, stressing that “the “meaning of this is that there is now a great deal of clarity between NNPC Ltd and its partners in the deepwater space.”

Section 9 of the Petroleum Industry Act signed by Buhari established Frontier Exploration Fund (FEF) with the allocation of 30% of profit oil and profit gas from NNPC’s upstream oil & gas contracts (production sharing, profit sharing & risk sharing contract) for the purpose.
The fund is for the development of “frontier acreages” — part of these frontier acreages include those Anambra, Dahomey, Bida, Chad & Benue trough.

In the first seven months of 2022, NNPC, expended about N3 billion in frontier exploration services.
The official kick off the drilling of crude oil in the north east is coming about two years after the mineral resource was discovered in the region.
It was further learnt that the oilfields in Bauchi and Gombe states will be developed by Sterling Global Oil, New Nigeria Development Commission (NNDC) and the NNPC Limited.

Last year, the Nigerian Petroleum Development Company (NPDC) issued a request for expressions of interest (EoI) on the development of the two licences in Nigeria’s North-east.

The integrated development of OPLs 809 and 810 in the Gongola Basin, in the Upper Benue trough extends about 1,000 km from the Bight of Benin to Lake Chad.Before then, the NPDC said it had discovered “huge commercial quantities” of oil and gas in the Kolmani River, adding that the blocks were more than 700 km from the coast, posing challenges to export options.It also proposed an onsite midstream refinery and power plant, saying that this would allow it to use these resources for local needs as well as “create an industrial hub” to provide economic benefits and employment.

point in the development of the facilities, in the midstream, the plan would involve a 150 MW power plant and a 50,000 barrel- per day condensate refinery.The NPDC, as it was then called, had drilled the Kolmani River 2 well in 2019 and the Kolmani River 3 in early 2021.

Bauchi state governor, Senator Bala Mohammed, had also recently said the oil and gas exploration at Kolmani River in Alkaleri Local government area of the state by the NNPC would ‘reverse the narrative of poverty and underdevelopment’ in the state.
Kolmani fields could hold as much as one billion barrels crude oil reserve, which could significantly raise Nigeria’s oil reserve.

The oil discovery in the north is coming at a time crude oil production has dropped to around one million barrels per day in the country, as a result of oil theft and vandalism, thereby hobbling the ability of the country to earn foreign exchange.

Emmanuel Iheanacho CEO of Integrated Oil and Gas, while reacting to the event said the country stands to benefit from this as it will help the country to meet its OPEC quota and restore its position as top oil producer in the continent.

“I see this as a welcome development and so long as seismic report shows the oil is in commercial quantity in those assets, it will go a long way to benefit the nation economically.
It is our natural resources and I support every effort aimed at advancing the economy and providing more foreign exchange for the country” Iheanacho former minister of interior said.

Chief executive officer, CEO, Center For The Promotion Of Private Enterprises, CPPE, Dr. Muda Yusuf said the political will of the president to commence oil drilling in the north should be applauded.
Yusuf, who is the former Director General of the Lagos Chamber of Commerce and Industry, LCCI, said the move will create more job opportunities in the country because it will drive new investments and also generate more foreign exchange.

He expected the federal government to initiate fresh moves to address insecurity which could be seen as a threat to the investment.
“I think one thing this will bring about is a new security initiative as widening insecurity is threatening investment across the entire energy sector. So I want to challenge government to draw a new security plan to safeguard expected investment from this initiative” he said.

Reports indicates that with an estimated 1 billion barrels of crude oil reserve from the new northern oil wells, Nigeria is expected to gain nearly $73 billion or N32.3 trillion at an average global crude oil price of $73 per barrel benchmark used for the 2023 budget proposal. This earning could be realised over a period of 10 years; depending on when commercial production starts.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said crude oil reserves were at 37 billion barrels. With 1bn oil and perhaps gas reserves coming from the Kolmani fields, Nigeria’s oil and gas reserves could shoot up higher.

According to reports the current crude reserve shows that the reserve slightly grew by 0.37 per cent to 37.046bn barrels as of January, 2022, from 36.910bn barrels in 2021. Gas reserves rose by one per cent to 208.62 Trillion Cubic Feet (TCF) from 206.53TCF. It is expected that gas reserves could grow to 220TCF in less than 10 years and 250TCF afterwards.

The integrated development process of the project entails that NNPC will not only drill the crude but also build a refinery that will process it into white products and also build a power plant which will utilise the energy from the wells to produce electricity.

This is because at over 700km from the coast, export and utilisation options of the crude are tough.
At the upstream level, there will be reprocessing of about 738 square kilometres of high-resolution 3D seismic data that have been captured earlier for the prospects area. The developers will also engage in delivering the integrated field studies and development plan for the Kolmani Main and the Kolmani South East fields, which are the two prospect areas.

At the midstream level, NNPC will establish gas processing facilities and a power plant that could generate at least 150 megawatts (MW) of electricity around the oilfield.
While expert firms operate the oil and gas midstream assets on their behalf, the partners will construct, operate and maintain a condensate refinery that could refine a minimum of 50,000 barrels per stream day (bpsd).

It is expected that the plan is to create an industrial hub around the oil field will spur national economic growth, create employment opportunities, promote social prosperity, enhance energy security, and provide optimal returns to investors.

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