President Muhammadu Buhari had a piece of advice for the Nigerian National Petroleum Company Limited (NNPCL) yesterday: it must avoid a repeat of the Niger Delta experience in the North.
He gave the admonition during the inauguration of the Kolmani Integrated Development Project (KIPRO) in Barambu (Gongola Basin), a community between Bauchi and Gombe states.
The project is the first oil production venture in the North.
The President told the NNPCL and other stakeholders to learn from the nation’s experience with oil production in the Niger Delta.
He said despite the diminishing interest towards fossil fuels globally, Nigeria has managed to attract over $3 billion worth of investment in the project.
The President listed the pitfalls to include, among others, environmental degradation, communal crises and youth restiveness.
He said they must not allow the circumstances that created unpleasant experiences in the country’s oil production activities.
According to him, stakeholders in the multi-dollar business must follow the path of harmonious relations with local communities.
He said: “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 potential for more deposits as we intensify exploration efforts.
“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.
“As a fully integrated in-situ development project, comprising upstream production, oil refining, power generation and fertilizer, the project promises many benefits for the nation.
“These include, but are not limited to, energy security, financial security, food security as well as overall socio-economic development for the country.
“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.
“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 Limited, NNDC, 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.”
President Buhari said the project, the first to show signs of success after several trials in different parts of the North, holds so many promises for the socio-economic development of the country, including financial, energy and food security, among other benefits.
The Kolmani Oil Prospecting Lease (OPL) 809 and 810 at the Kolmani field will be the first oil drilling in the North. Oil was discovered in commercial volume in the region about two years ago
It is believed that the over one billion barrels of crude in oil reserves could significantly raise Nigeria’s oil reserve which has not grown in 10 years.
To make it easier for the venture to succeed, the President said he had instructed the NNPCL to harness all available resources within its control to de-risk the project.
Buhari 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 its 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.”
Senate President Ahmad Lawan expressed delight that the two host states will soon be eligible to receive 13 per cent derivation fund as oil-producing states.
Calling for a constitutional review of the derivation formula, Lawan advocated for three per cent for the Host Communities Development Fund.
He described the inauguration as a landmark achievement, noting that the Petroleum Industry Act (PIA) was also passed under the Buhari administration.
The Senate president urged industry operators to strive to discover more oil fields before the expiration of the Buhari administration since, according to him, the PIA has provided the right framework for funding frontier basins.
He warned that the misappropriation of the funds going to the Niger Delta region should not be allowed to happen to the funds expected from the sale of crude products from the facilities.
Lawan said: “We must make serious efforts to diversify our economy. The fact that we have oil doesn’t give us the development that we need. What has happened in Niger Delta has been worrisome.”
Gombe Governor Inuwa Yahaya, who described the event as historic, noted that with the new oil find, the North should expect more development.
