$3bn Oil Exploration Project Inauguratesd In North-east, Buhari
President Muhammadu Buhari, on Tuesday, flagged off the commercial production of crude oil and gas from the $3bn Kolmani Integrated Development Project.
The field, according to its promoters, will produce about 50,000 barrels of crude oil per day and holds over one billion barrels of crude oil reserves, shooting up Nigeria’s oil reserves to over 38 billion barrels.
This came as the Nigerian National Petroleum Company Limited revealed that it had identified several drillable prospects in the area, as it noted that it was also making an oil exploration re-entry into the Chad Basin.
In his address at the event, Buhari said the Kolmani River field attracted $3bn worth of investments despite the lack of appetite in the oil sector in recent times.
He said, “Considering the landlocked location and the huge capital requirement, the economics of the project is 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 to attract investment of over $3bn to this project.”
Buhari viewed the ceremony as important in the economic history of Nigeria, “as we move 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.”
He added, “This is indeed significant considering that efforts to find commercial oil and gas outside the established Niger Delta Basin were attempted for many years without the desired outcomes.
“However, the successful discovery of the Kolmani oil and gas field by NNPC and her partners has finally broken the jinx record by the confirmation of a huge commercial deposits of hydrocarbons in Kolmani River field.”
He said the discovery had emanated from the Federal Government’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.
He said similar activities across the other basins were currently actively ongoing.
“We are pleased with the current discovery of over one billion barrels of oil reserves and 500 billion cubic feet of gas within the Kolmani area and the huge potentials for more deposits as we intensify exploration efforts,” the President stated.
He added, “It is good to note that the discovery has now attracted investment for an end-to-end integrated development and monetization 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.”
Buhari also said he had engaged the governors of Bauchi and Gombe states, and both had given him assurances of their unwavering commitment and willingness to ensure support and cooperation in the localities as the activity affected the local populations
“I urge the NNPC Ltd, NNDC (New Nigeria Development Company), and their strategic partners to ensure all lessons learnt from our years of experience as an oil-producing nation are utilised to ensure harmonious relationship with the local communities,” Buhari stated.
The Senate is not a court, Stakeholders urge incoming National Assembly
Stakeholders in Nigeria’s oil and gas sector have raised the alarm over a fresh threat being constituted to the business environment as a result of the Senate’s directive for Nigeria Liquefied Natural Gas (NLNG) to pay N18.4 billion to host communities for the right of way (RoW) it acquired in 1989 for N73 million.
The stakeholders, who gathered at the Platforms Africa Forum 2022 in Lagos, maintained that the Senate lacked the power to order NLNG to pay N18.4 billion.
Partner, Bloomfield Law Practice, Dr. Ayodele Oni, who spoke from Houston, Texas, and the Keynote speaker, Barrister Jide Ologun, unanimously declared that the Senate’s power guaranteed by the constitution is enormous, but does not include giving an order to a company to pay the money within a stipulated time.
“The Senate is not a court. That right to order resides solely with the Court,” Ologun said.
“The 9th National Assembly has done well and sets a standard for the 10th Parliament to surpass. But one area the forthcoming Assembly should refrain from is giving a directive to companies. The recent directive to NLNG to pay N18.4bn within eight weeks is not within the powers of the Senate, ” Oni added.
Energy analyst, Tajudeen Adigun, who stated that Nigeria’s energy sector is suffering from the dearth of FDI with many companies folding up due to legislation, urged the 10th National Assembly to concentrate on making laws that will engender FDI.
“The Senate has the constitutional oversight function but in discharging this role, it must always consider the ease of doing business.
“The communities must be protected while companies deserve protection to succeed. The NLNG is a company bound by law and anyone enraged by the action or inaction of the company should approach a court for redress. Well, they can write a petition to the NASS and the parliament to have the right to accept the petition and look into it. But only the Court, not the NASS, has the right to make an order for a company to pay within a stipulated time. The bottom line is that the parliament should consider the ease of doing business in discharging its legislative duties.”
The Nigerian Senate had in September 2022, ordered the NLNG Limited to pay N18.4 billion on its acquired land for Right of Way (RoW) to 73 host communities and 200 families in Bonny, Rivers State, within two months.
The Senate, which had received a petition from the communities through its Committee on Ethics, Privileges and Public Petitions, confirmed that the NLNG actually paid N73 million in 1989 when it acquired the land for its right of way (RoW). It, notwithstanding, issued a directive that the NLNG has just two months to pay up.
The NLNG, in a statement issued a day after the Senate’s directives, simply said it was evaluating the resolution and circumstances surrounding it. It adds: “NLNG wishes to state that it has always conducted its business responsibly and in accordance with the laws of the Federal Republic of Nigeria, including in this specific matter.”