On October 10, the NNPC drilling crew working at Kolmani River-II in Gongola Basin encountered hydrocarbon outflow to the wellhead while testing. Preliminary evidence from the exploration area revealed that the hydrocarbon deposits consist of gas, condensate, and light, sweet crude of API gravity between 38 and 41 degrees.
While the bulk of Nigeria’s energy wealth is concentrated in the prolific Niger Delta, exploration for oil in the North East (Gongola and Chad basins) picked up recently, and this particular find is a major victory for NNPC in its quest to identify new hydrocarbon basins outside of the South-South region.
The exploration team is yet to provide estimates of hydrocarbon quantities, but should the find be significant, Nigeria’s Reserve: Production ratio just got a major boost. Besides, this event is expected to spur concerted exploration in and around the region for more hydrocarbon deposits. New, commercially viable finds can coincide with the complete overhaul of the four national refineries (including Kaduna) scheduled for completion around 2023.
Crude and Gas feedstock can come from that area to the Kaduna refinery, rather than transporting via pipelines from the South-South. This find is also significant because it opens up opportunities for new Oil and Gas infrastructure (including pipelines, terminals & gas processing facilities) to reduce Nigeria’s deficit and underdeveloped value chain within the sector.
We also expect that investors will tap the potential of modular refineries to process crude and facilitate development of the regional value chain. Meanwhile, new retail stations will open up a nascent export market in neighbouring Chad and Niger. Thermal power stations in and around the North-East/North-West will also benefit of gas (Associated/NonAssociated) from the discoveries.
However, the key investment risk that regulators including NNPC, DPR (and others enabled by the upcoming PIGB) have to mitigate, is the security conundrum in the region. There are indications that this discovery might open up conversations around resource control and a review of the derivation formula.
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Hope the finding is in commercial quantity and if is so the search should be extended to areas outside Gongola and Benue basin but Kaduna River,sokoto and Bidda basin
NNPC is not a regulatory Agency.
Please let us take note.
NNPC is like Shell, Chevron etc. NNPC is like Petrobras and Sinopec. It is an Oil Company but owned by the Government. It isn’t a regulatory Agency.
The Regulatory Agency for the Oil and Gas Industry in Nigeria is the DEPARTMENT OF PETROLEUM RESOURCES (DPR).
Who even told them that NNPC is a regulatory agency. Misinforming journalism.
Congrats to Nigeria on the new find. May it benefit us all.