After four decades of fruitless search, the recent discovery of hydrocarbon deposits in the Kolmani River II Well on the Upper Benue Trough, Gongola Basin, in the Northeastern part of the country by the Nigerian National Petroleum Corporation (NNPC) has been greeted with mixed feelings.
Indeed, stakeholders appears divided over the discovery, especially at it relates to what the exploration stage of the find would cost.
While some say it is too early to take a position on the discovery, others say the commercial viability of the find would determine the next phase and the way to go for the country
The NNPC had in the penultimate week stated that the corporation acquired 435.54km2 of 3D seismic data on Kolmani Prospect in the Upper Benue Trough, Gongola Basin. This was to evaluate Shell Nigeria Exploration and Production Company (SNEPCo) Kolmani River 1 Well Discovery of 33 BCF and explore deeper levels.
The corporation said the well was drilled with “IKENGA RIG 101” to a total depth of 13,701 feet, and in the process encountered oil and gas in several levels. It added that a drill stem test (DST) is currently ongoing to confirm the commercial viability and flow of the Kolmani River reservoirs.
The corporation explained that on Thursday, October 10, 2019, at 18:02hours, one of the reservoirs was perforated and hydrocarbon started flowing to the wellhead at 21:20hours in which the gas component was flared to prevent air charge around the rig.
Preliminary reports indicated that the discovery consists of gas, condensate and light sweet oil of API gravity ranging from 38 to 41 found in stacked siliciclastic cretaceous reservoirs of Yolde, Bima Sandstone and Pre-Bima formations.
NNPC said computation of the hydrocarbon volume is ongoing and will be announced in due course.
The corporation has also acquired additional 1183km2 of 3D seismic data over highly prospective areas of Gongola Basin with a view to evaluating the full hydrocarbon potential of the Basin.
NNPC disclosed that it has deployed world-class cutting-edge technologies, including surface geochemistry, ground gravity/magnetic, stress field detection, full tensor gradiometry aerial surveys to de-risk exploration in the frontier basins. The NNPC plans to drill additional wells for full evaluation of the hydrocarbon volume in the Gongola Basin.
It would be recalled that during the spud-in ceremony of Kolmani River II, President Muhammadu stated the commitment of his administration to the exploration for Oil and Gas in the frontier basins in the entire length and breadth of the country. The basins include: the Benue Trough, Chad Basin, Sokoto and Bida Basins.
He also stated that attention would be given to the Dahomey and Anambra Basins, which have already witnessed oil and gas discoveries.
The discovery of oil and gas in commercial quantity in the Gongola Basin will attract foreign investment, generate employment for people to earn income and increase government revenues.
Reacting to the development, President, Nigerian Association of Petroleum Explorationists (NAPE), Mr Ajibola Oyebamiji, told Sunday Sun that the discovery was a good development for the country and the international community as it would help shift attention from the Niger Delta region.
He explained that what may be significant to the country in terms of hydrocarbon quantity may not actually represent significance for the International Oil Companies (IOCs).
‘‘Even if the discovery were to be for just gas alone, do you realize how that would help to solve the country’s power sector challenges. But in this case, the discovery was for gas and oil which I believe is a step in the right direction,’’ he said.
Oyebamiji was, however, quick to dispel insinuations that renewed vigour in the search for oil in the North has tribal undertone, disclosing that just as the search was ongoing in the North, the same was happening in other regions or basins.
Specifically, he alluded to the efforts made by some indigenous oil companies and IOCs to prospect for oil in other regions.
Only recently, he said, Eni, through its affiliate, Nigeria Agip Oil Company (NAOC), made a huge discovery of about one trillion cubic feet of gas and 60 million barrels of associated condensate in the deep drilled sequences of the Obiafu-Obrikom fields in Oil Mining Lease (OML) 61.
According to the geologist, it was erroneous for anyone to think that the search for oil in the North or any other part of the country is a waste of resources.
“In the business of searching for oil, no money can be considered to be a waste because a well that you drilled some years ago and turned out to be empty could be productive when you return there after several years as a result of latest technology. That is the case with this recent discovery in the Gongola Basin,” he said.
Professor of Geology and NNPC Chair in Basinal Studies, Nuhu Obaje, while lauding the development, especially as the search has been on for above four decades, was quick to point out the environmental and cost implications.
“Definitely the environment will suffer. There will be dislocation and relocation of communities, pollution and destruction to farmlands and the aquatic ecosystem, but futuristic strategies for mitigation and reclamation should already begin in earnest. But above all, Nigeria will benefit. This is a milestone achievement for the NNPC and critical stakeholders,” Obaje stated.
While analysts had projected a high cost of oil production in the region, especially with the limited oil and gas infrastructure there, Obaje said despite being far from the coast, the construction of national grids of pipelines and other flow infrastructure, as well as the proposed trans-Saharan pipeline would make the economics optimal for further exploration and harnessing of the potentials in the frontier basins.
“More employment will be generated for all Nigerians while the region will benefit from infrastructural development and several corporate social responsibility projects and programmes. More significantly, investors confidence has been boosted such that we expect some good amount of private sector investments in the basin, and indeed in the other inland frontier basins comprising the Bida, Sokoto, Anambra and onshore Dahomey basins in the years ahead,” Obaje said.
Former President of NAPE, Mr Abiodun Adesanya described the discovery as a positive accomplishment and a game changer for national development.
According to him, the fact that the country has oil and gas discovery from another section of the country means that its benefits to the citizens will spread, stressing that the resources would be useful for economic development, especially for addressing the country’s energy deficiency.
“There are a lot of things we can do with the gas locally in that area and oil can be piped as feedstock to the Kaduna Refinery, or a new one that may be built in Gombe area,” Adesanya said.
Stating that the discovery would reduce over dependency on resources from the Niger Delta, Adesanya added that the find, however, needed to be appraised to confirm the extent and determine the size of the oil and gas reserves found.
“Once we cross that threshold, it can then be packaged into a licensing round that would naturally be attractive to both local and international investors.
“As far as cost is concerned, when you commence exploration in new areas, cost could be higher than normal because there are lots of unknowns.
But, energy expert and partner, Bloomfield Law Practice, Mr Ayodele Oni, approached the development differently, saying, “People can argue rightly that we are not receiving enough investments for our already prolific finds, speak much less of new finds. But my view is that the more the merrier. If we don’t receive same now, we could in the future when the country is more attractive to foreign direct investments.’’
He said the oil find in that region should not be seen as a way of rewarding political patronage because NNPC has a contract bidding process which is fair and transparent, with greater emphasis on technical capabilities and skill rather than ethno-regional sentiment.
He explained that there are no indications that the discovery of oil in the Gongola Basin is in commercial quantity.
“Going by the provisions of the Petroleum Act, 1969, oil is discovered in commercial quantities when the licensed area is capable of producing at least 10,000 barrels of oil per day (bpd). A drill stem test is currently ongoing to confirm the commercial viability and flow of the Kolmani River reservoirs,” Oni said.
He explained that the zeal to discover oil in other regions was because the Federal Government was keen to increase government revenue, attract foreign investment and generate employment.
In addition to the Gongola Basin discovery, he disclosed that there have been reported discoveries as well as prospects in the Bida and Lake Chad Basins, adding that the NNPC has restated that due attention would be given to the Dahomey and Anambra Basins which have already witnessed oil and gas discoveries.