President Mohammadu Buhari has charged the Nigerian National Petroleum Corporation Limited(NNPCL) to aggressively’ deploy a vast asset portfolio across all corridors of its operations to de-risk the newly inaugurated Kolmani Integrated Development project at Kolmani River II Oil Field, in view of the landlocked location.
The Nigerian President made this assertion, Tuesday, in Bauchi at the Flag-off Ceremony of the Kolmani Integrated Development Project, a fully integrated in-situ development project comprising upstream production, oil refining, power generation, and fertilizer.
EnergyDay gathered that the first phase of the exploration at Kolmani River II Oil Field will involve the development of an oil refinery of up to 120,000 barrels per day capacity, a gas processing plant of about 500 million standard cubic feet per day, a power plant of up to 300-megawatt capacity and a fertilizer plant of 2,500 tons per day, according to the Nigerian National Petroleum Company (NNPC) Limited.
The statement of the President is coming against the backdrop of huge capital requirements needed to sustain the economics of the project, which he described as a challenging proposition.
He particularly emphasized the inherent bottlenecks and associated risks that the government had to overcome before raising over $ 3 billion investment that has so far been deployed into driving the project, even at a time of near-zero appetite for investment in fossil energy.
He said, “Consequently, from the onset, I instructed NNPC Limited to utilise and leverage their project to attract the much-needed investment. The Corporation must continue along these lines.
“Considering the landlocked location and the huge capital requirement, the economics of the project is a challenging proposition.
“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 USD 3 billion to this project,” he said.
The President further stated that the huge investment the project had attracted “will surely be a reference subject for discussion in the industry as we pursue the just energy transition programme that will culminate in our country achieving Net- Zero position by the year 2060.”
He further said, “but not limited to Energy Security, Financial Security as well as overall socio-economic development of the country,” President Buhari affirmed that his administration’s charge to NNPCL to explore other Oil and Gas fields beyond the Niger Delta Basins has finally yielded commendable results.
“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 by the confirmation of huge commercial deposits of hydrocarbons in Kolmani River field.
“This discovery had emanated from our charge to the NNPC to re-strategize and expand its oil and gas exploration footprints to the frontier basins of Anambra, Dahomey, Sokoto, Benue trough, Chad, and Bida Basins. Similar activities across the other basins are currently actively ongoing.
“We are pleased with the current discovery of over 1 billion barrels of oil reserves and 500 billion Cubic Feet of Gas within the Kolmani area and the huge potential for more deposits as we intensify exploration efforts.”
Looking forward to the successful delivery of the Project which he called “another vital pillar in the Country’s economic architecture,” President Buhari urged NNPCL and partners to work with all stakeholders for smooth execution of the project:
“I have engaged the Governors of Bauchi and Gombe States, and both have given me assurances of their unwavering commitment and willingness to ensure support and cooperation in these localities as this activity affects the local populations.
“I urge the NNPC Ltd, NNDC, and their Strategic partners to ensure all lessons learned from our years of experience as an oil-producing nation are utilized to ensure harmonious relationship with the local communities.”
Timipre Sylva, Minister of State for Petroleum Resources, in his remark at the inauguration of the oil field said that drilling for hydrocarbons at the Upper Benue Trough/Gongola Basin, is a major pathway to the energy transition.
He said, “We recognise that reduction in fossil fuel revenue, without sufficient time and support to manage macroeconomic risks and the structural transformation required to build a diversified, sustainable and resilient economy, will have terrible social impact on millions of Nigerians.
“The risks arising from our current challenges of energy poverty, lack of access to clean cooking fuel, insecurity, and unemployment are pervasive across the country, but so is the value proposition to all stakeholders. The reward of getting it right is so huge that we have no option but to stay the course and see it through.
He noted that the expansion of other basins by NNPCL and its partners would give the country the fighting chance to address the myriad of issues that it is faced with.
Sylva further added that the new investment in the Northern part of the country has enabled Nigeria to redraw its hydrocarbon map to include a region, which was once the subject of speculative optimism and crystallising instead into definitive prospects.
Mele Kyari, the Group CEO NNPCL, on his part disclosed that the search for oil and gas in the frontier basins of Chad, Sokoto, Anambra Platform, Calabar Embarkment, Benue Trough, Dahomey, Bida, and the Ultra-Deepwater Niger Delta had spanned decades without significant outcomes.
He said, “However, the singular determination of Mr. President to ensure optimum exploration and exploitation of our natural resources and your consequential directives for NNPC Limited to strategize and utilize available human, technological, and other material resources to prosecute exploration activities in all Frontier Basins resulted in the discovery of commercial oil and gas deposits in the Kolmani Prospect in April 2019,” Kyari added.
Asiwaju Bola Tinubu, All Progressives Congress (APC), presidential flag bearer, promised his commitment to sustain the project if elected President in 2023.
The former Lagos State Governor, while commending President Buhari revealed that Nigeria has been positioned on the pathway to prosperity with the project.
He said, “We may be hungry but we can manage our hunger; we don’t want to kill each other. Today, you gave us a path to prosperity, a path to success. The only thing that I may want to exclude and argue about is the West and Europe. They use our coal and fuel to develop their economy and they ask us to be conscious, but I like your answer.
“We cannot stay hungry and starve to death. We have to take care of ourselves unless they pay compensation to us; that is where we stand,” the APC Presidential candidate said.
Tinubu however promised to recharge Lake Chad, as a means of tackling hunger and insurgency, if offered the opportunity to rule Nigeria.