Nigeria’s oil reserves stagnated at 37 billion barrels but Kolmani crude oil asset could change that.
This is according to Waziri Adio, the former executive secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), who was a guest on Arise TV’s Global Business Report on Wednesday, November 23.
Adio said the Kolmani project could add to Nigeria’s crude oil reserves, stating that new crude oil discoveries in other parts of the country add to production figures and increase revenue for the country.
During the flag-off campaign on Tuesday, Mark Anukwu, petroleum engineering manager at Nigerian National Petroleum Company (NNPC) Limited, said the Kolmani project is a success and there is verifiable evidence of oil and gas in the prospect and the discovery is a success for Nigeria.
Also, on Tuesday, Bala Wunti, the chief upstream investment officer (CUIO), NNPC Upstream Investment Management Services (NUIMS), highlighted the fact that the monetization of the Kolmani project matters a lot and although Kolmani project location is a landlocked area, the NNPC is innovating around the challenge.
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While speaking on Arise TV’s Global Business Report, he referenced the current happenings in Nigeria’s oil industry. He gave instances where Nigeria used to produce up to 2.5 million barrels of oil per day, but the country is now producing only 1 million barrels per day, as of October 2022.
Value chain optimization: Adio stated that developing a gas-to-power plant, a refinery, a gas processing plant, and a fertilizer plant is crucial and significant because the location of the Kolmani oil field is quite a distance from the shore. So, the only way for the project to make business sense is by developing a hub around the resources. He said some people might tag the project a bit late as crude oil is said to be having its last hoorah in the age of the energy transition.
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However, the emergence of new crude oil discoveries can be used to solve urgent national challenges because the country needs all the revenue it can get and Nigeria needs to also increase its self-sufficiency in terms of petroleum products as well as generating as much power as we can. If Nigeria is able to bring the project to fruition, it is worth celebrating.
He said that the Kolmani oil project could start up exploration in other basins that are still unexplored.
Resource curse: During the flag-off campaign of the Kolmani oil field on Tuesday senate president, Ahmad Lawan said the mistakes of the Niger Delta must not be repeated in the Kolmani project. Commenting on this, Adio said he believes the senate president was referencing the fact that despite the compensation packages and the setting up of interventionist agencies like the Niger Delta Development Commission (NDDC) in the Niger Delta region, for the impact of oil and gas exploration on their environment and livelihoods, it has not translated to a better life for the people.
$3 billion investment: Commenting on the $3 billion investment claim on the Kolmani project, Adio said he does not necessarily think the figure stated means money on the table at this time, but the money that will come in along the line. He said some of the partners like Sterling Oil Exploration and Production, which produces about 50,000 barrels per day, is one of the solid companies around.
He went further to state that the NNPC and its partners should be more transparent about the details of the Kolmani project. He said the NNPC should let Nigerians know if the proven reserves of 1 billion barrels have been verified by a third party.
However, the important thing as analyzed by Mr. Adio is the successful drilling of the crude oil and the processing of the natural gas in the Kolmani prospect, a power plant can be established to serve the people of the areas/communities and a refinery can be built as well.
For the record: Nairametrics earlier reported that the NNPC stated that in 2019 they applied cutting-edge technologies and area surveys to de-risk exploration in frontier basins, meaning that frontier exploration is yielding positive results today in Kolmani. The Kolmani 809 and 810 oil prospecting licenses (OPLs) are at the Gongola basin between Bauchi and Gombe states.