Kolmani oil well: The controversy that may arise, the benefits inherent
By Ben Ngwakwe, Gombe
A Petroleum Geologist, Dr. Babangida Mohammed, has pointed out some of the controversies that are likely to occur from the first Oil Well in the Northern Nigeria.
Among the blocks, the Kolmani area was found to be an excellent target. In addition to the first oil exploratory well in Kolmani (well, Kolmani River – 1) that was drilled by Shell in 2000, from 2015 to date, the NNPC through Frontier Exploration Services has drilled three (3) additional exploratory wells (wells, Kolmani River – II, Kolmani River – III and Kolmani River – IV). At least a billion barrel of oil and large volumes of gas were discovered from the exploratory wells.
In addition, the landmass of Kolmani area of Gongola Basin is within Bauchi (Alkaleri LGA) and Gombe (Akko LGA). More so, the structure that trapped the oil and reservoirs beneath the earth (estimated around 3500 meters deep) extends to both Gombe and Bauchi States but, with slight move toward Gombe State.
To make things clear, there is a need to understand the difference between exploratory well and a development well. An Exploratory Well is an effort to determine if oil or gas reserve are present i.e the probability of success (POS) whilst, Development well is drilled after an area has been proven to hold proven oil or gas reserve and is typically the final phase of the drilling process.
Mohammed narrated how the oil wells that were drilled in the basin are Exploratory Wells (test wells – widlcats). Now that oil and gas has been discovered in KOLMANI OILFIELD (OPL’s 809 and 810), the blocks had since been handed over to developers (NNDC, SEEPCO, Africa OIL Movers etc) for oil and gas production.
It is obvious, the event marked an official flag-off of KOLMANI INTEGRATED DEVELOPMENT PROJECT (KIPRO) that comprises of activities of UPSTREAM, MIDSTREAM & DOWNSTREAM industry value-chain. Therefore, the flag-off of first oil well in KOLMANI, should be a DEVELOPMENT WELL and may be the first of its kind in northern Nigeria.
According to the Geologist in his statement, the project will provide the following -: A Drilling of Development Wells for oil and gas production,
An Oil Refinery around Kolmani with up to 120,000 barrels per day capacity, A Gas processing plant of up to 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.
It has been on record, between 1970’s, 1980’s to date, the Nigerian National Petroleum Corporation and other multinationals (e.g. Shell, Chevron and Elf) drilled a total of 28 oil exploratory wells in Chad (Bornu) and Upper Benue Trough (The Gongola Basin). However, the oil and gas prospecting was suspended in the past due to several political gimmicks! With the inception of the Buhari administration, the NNPC revisited the prospecting blocks in Chad (Bornu) Basin and Gongola Basin. Modern day technology, especially 3D Seismic Acquisition was employed.
While Congratulating, the people of Bauchi and Gombe States in their prayers and unity in the struggle, he cautioned that peace is paramount.
No doubt, the Groundbreaking ceremony of the Kolmani Oil Prospecting Lease (OPL) 809 and 810 at the Kolmani field site that shared boundaries between Bauchi and Gombe states, is blessings to the states, to the people, host communities where the Oil wells was discovered, generate revenue, provide employment opportunities,open the areas for investors and development.
Other benefits are the oil refining, power generation and fertiliser could spring up as a result of this discovery.
President Muhammadu Buhari said the investment would attract $3 billion investment while Bauchi and Gombe states have joined the league of Oil producing States that are entitled to 13% derivation from the federation Account.
This is real historical and commended for the first time, the exploration will provide 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 fertiliser plant of 2,500 tons per day, according to the Nigerian National Petroleum Company (NNPC) Limited.
The President Buhari made it that one billion barrels of crude oil reserves and 500 billion standard cubic feet of gas exists in Kolmani River Oil and Gas Field while his administration has attracted over $3 billion in the oil and gas sector at a time of near-zero appetite for investment in fossil energy.
The roll calls of who is who from the North at the ground breaking ceremony on tuesday,22ne November,2022, was a clear manifestation and development that the project will give to them particularly the North East region.
The President Buhari who was a former Governor of the area said “efforts to find commercial oil and gas outside the established Niger Delta Basin was attempted for many years without the desired outcomes.
“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.”
According to President Muhammadu Buhari, “It is good to note that the discovery has now attracted investment for an end-to-end integrated development and monetisation of the hydrocarbon resources.”
All the speakers pointed out the benefits to the states and the host communities.
” 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 attract investment of over $3 billion to this project.
“This will surely be a reference subject for favourable 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.
“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 catastrophic social knock-on effects for millions of people in Nigeria and this cannot be allowed to happen.
“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. This is why I welcome the collaboration between NNPC Limited and its partners in this campaign, and look forward to the expansion of these partnerships with respect to other basins, which will give us a fighting chance to address the myriad of issues that confront us.
“On 13 per cent derivation, I think we should have a constitutional review on how you apply the derivation. That’s the reason why we have to go for three per cent to host community development. I believe that the host communities here will soon see a lot of activities and will also deserve more resources for their development. I, therefore, advocate that not only the Community Development Funds, even the 13 per cent in the Constitution should have serious bearing on the lives of host communities that bear the brunt of oil exploration.”
While the Senate President, Ahmed Lawan cautioned against the development of Niger/Delta Development Commission not to repeat itself in the new project, “what has been happening in the Niger Delta Development Commission (NDDC) with the 13 per cent derivation or maybe the application or misapplication of the resources of NDDC. This is something the new oil bearing states should learn from,” he warned.
