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Nigeria begins oil drilling in the north



Flag off Oil well in Kolmani region

Prominent Nigerians, including President Muhammadu Buhari, a retinue of governors from the northern region, ministers, the presidential candidate of the All Progressives Congress (APC), Bola Tinubu and oil industry operators yesterday expressed optimism over the opportunities presented by the drilling of first oil in the north.

A visibly elated Buhari, in his speech, said it was to the credit of his government that at a time that financing of fossil fuel projects was drying up due to the energy transition drive, his administration was able to attract $3 billion to the sector.

Buhari described the day as important in the economic history of the nation as it moves closer to production of oil and gas in the Upper Benue Trough, specifically, the Kolmani River oil and gas field, straddling Bauchi and Gombe States in the north-east.

According to the provisions of the Production Sharing Contract (PSC), while the Nigerian National Petroleum Company Limited (NNPC) is the concessionaire of the blocks, the NNPC Exploration and Production Limited (NEPL) and New Nigeria Development Company Limited (NNDC) are the contractor parties.


In addition, AOML Consortium signed a strategic partnership with the contractors to provide funding and technical capabilities for the integrated oil and gas development project and to be compensated from the contractor’s profit oil after commencement of operations.

It also has an in-situ integrated development plan, which guarantees evacuation and monetisation route for the hydrocarbon in the location, thereby eliminating the high cost and burden of building a crude and product pipelines.

THISDAY learnt that the first phase of the integrated development project would entail an oil refinery of up to 120,000 barrels per day capacity, a gas processing plant of up to 500 million standard cubic feet per day, a power plant of up to 300-megawatt capacity and a fertiliser plant of 2,500 tons per day.

Buhari noted that the feat was significant considering that efforts to find commercial oil and gas outside the established Niger Delta Basin was attempted for many years without the desired outcomes.

Flag off Oil well in Kolmani region

However, he explained that the successful discovery of the Kolmani oil and gas field by NNPC and her partners has finally broken the jinx by the confirmation of huge commercial deposits of hydrocarbons in Kolmani River field.


The president noted that the discovery of the oilfields emanated from his administration’s charge to the NNPC to re-strategise and expand its oil and gas exploration footprints to the frontier basins of Anambra, Dahomey, Sokoto, Benue trough, Chad and Bida Basins. Similar activities across the other basins, he pointed out, are currently actively ongoing.

“We are pleased with the current discovery of over 1 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.

“It is good to note that the discovery has now attracted investment for an end-to-end integrated development and monetisation of the hydrocarbon resources.

“As a fully integrated in-situ development project comprising upstream production, oil refining, power generation and fertiliser, the project promises many benefits for the nation. This includes but not limited to energy security, financial security, food security as well as overall socio-economic development for the country,” the president noted.


The president added that considering the land-locked location and the huge capital requirement, the economics of the project was a challenging proposition.

“Consequently, from the onset, I instructed NNPC Limited to utilise and leverage their vast asset portfolio across all corridors of its operations to de-risk the project to attract the much-needed investment. I have directed NNPC to continue along these lines.

“It is therefore to the credit of this administration that at a time when there is near zero appetite for investment in fossil energy, coupled with the location challenges, we are able attract investment of over $3 billion to this project,” Buhari said.


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