President Muhammadu Buhari recently flagged off drilling activities by the Nigeria National Petroleum Corporation (NNPC) in the Kolmani River 1 oil well in the Gongola Basin of the Benue Trough, Bauchi State. In the same vein he also directed the extension of exploration activities related to the search for petroleum in six other basins in the country, pursuant to boosting the country’s proven petroleum resources.
The exercise which is referred to in industry circles as ‘spud-in’, is a repeated attempt at exploring and extracting oil in the basin following an earlier undertaking, this time by some multinational oil companies in the early nineties, who abandoned the enterprise half-way due to the limited success of the effort. The renewed effort is informed by the acquisition of new and more sophisticated data and by the NNPC with which it can resolve the terrain.
Speaking at the flag off ceremony, Buhari who is also the Minister of Petroleum Resources commended NNPC for its role in “re-invigorating exploration operations in the basins.” He said the exercise “would help Nigeria secure her energy resources” and make for a “balanced resource distribution” as well as foster a strong economic base and boost industrialization. The President also said a key aspect of the administration’s Economic Recovery and Growth Plan (ERGP) is to ensure national energy sufficiency, which can only be attained by exploring for hydro carbon resources not only in the conventional basins but also in the frontier ones as well.
According to Buhari, these wells include Chad, Bida, Dahomey, Sokoto and Anambra. Group Managing Director of the NNPC Dr Maikanti Baru said the earlier efforts at exploring those basins were carried out by private companies who would not go beyond their budgets. He said such limitations would not be the problem of NNPC. A frontier basin is one where exploration activities have not been carried out or one where short term exploration activities have been carried out leading to discovery of a significant volume of undiscovered hydro carbon resources.
Traditionally Nigeria’s vast oil and gas resources are located in the Niger Delta region, while the basins under consideration are outside the zone. Meanwhile in the course of time some areas of the country outside the Niger Delta have shown promise of having petroleum. Exploration activities had progressed in areas such as the Chad Basin, which the Boko Haram insurgency is said to have halted. Serious activity had also taken place in Bauchi and Sokoto, among other areas. Hence the intervention of the President was to usher a welcome change of the narrative of Nigeria’s oil and gas resources by foraying into fresh terrain. However, given that the new initiative borders on basins which have been explored earlier with limited success, the new ventures are expected to enjoy better prospects since they would be guided by the experiences of the past. The new ventures are expected to do well by operating along a critical path as would be illuminated by the insights of the earlier explorers.
Such a critical path should identify with certain imperatives including cost consciousness which ostensibly determined the operational limits of the earlier private sector ventures. NNPC should adopt the imperative of balancing cost with dividends to ensure that the country is not led into a wild goose chase for oil which may be available but not in commercial quantities to justify the huge investments deployed there. The petroleum business at any level succeeds only when market driven strict business principles and practices are applied to it. And the exploration of the designated basins qualifies for such disciplined disposition.
It is not very nice that President waited until the middle of the election season to make this heavy intervention. It is important to that this exploration activity is stepped up after the election, otherwise people will say it was an election gimmick.