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Special Report : President flags off US$3 billion crude oil investment project in northeastern Nigeria

28 November 2022
Reading time: 7 minutes

Nigeria’s President Muhammadu Buhari officially flagged off the exploration and drilling of crude oil at Kolmani village between the Bauchi and Gombe states in the northeast of the country on Tuesday, November 22 – and the state-owned Nigerian National Petroleum Corporation Ltd (NNPC) has already started drilling for oil and gas in a field that has reserves of 1 billion barrels.

The Kolmani Integrated Development Project of Oil Prospecting Lease (OPL) 809 and 810 at the site is the first of its kind in the northeast.

The NNPC said in a statement that phase one of the Kolmani project would have an oil refinery, gas processing unit, 300-megawatt (MW) power plant and fertiliser plant producing 2,500 tons a day.

The corporation first announced the discovery crude oil, gas and condensate in commercial quantity in Kolmani in 2019.

Buhari said Kolmani had 1 billion barrels of oil reserves and 500 billion cubic feet of gas.

No oil major was involved in the project being developed by NNPC, local firm Sterling Global Oil and the New Nigeria Development Commission, a conglomerate owned by 19 northern states.

“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 location challenges, we are able attract investment of over US$3 billion for this project,” Buhari said at a ceremony to start the oil project.

Buhari urged the NNPC and its partners to work with local communities and draw lessons from the restive Niger Delta, where militants had in the past blown up pipelines, accusing oil companies of neglecting locals.

Mustapha Adam Kolo, a senior lecturer at the geography department at the University of Maiduguri, told RNI that he believed the discovery of crude oil in the northeast was a welcome development. I have read and seen a lot of proposals; the federal government wants to construct a refinery because channelling the oil through pipelines to other places is very expensive.

“The new refinery would be capable of refining about 120,000 barrels of crude oil a day. The government also wants to establish a gas power plant in Kolmani for electricity supply. The gas processing plant can produce up to 500 million standard cubic feet of gas a day and the power plant up to 300MW. The proposed fertiliser plant will be able to produce 2,500 tons a day.

“Many people attended the president’s flagging off of the drilling project in Kolmani, a border town between Bauchi and Gombe States. The government stated that the investment in the crude oil site was about US$3 billion dollars and it’s going to stimulate the economy. This is the first time the president is injecting such a huge amount of money into diversification to improve the nation’s economy.” 

Kolo said his only reservation was that when drilling for crude oil there were certain environmental issues that needed to be taken into account to avoid serious consequences. He said no one had talked about the environmental issues related to the drilling at the flagging off ceremony. They remarked only on its benefits, with a special focus on the contributions towards the economic growth of the country.

“Only Simon Lalong, the chairman of the Northern Governors’ Forum [NGF], who is also the governor of Plateau State, spoke about the issue of an environmental impact assessment. So, the question is, has the government come up with rigorous and acceptable environmental impact assessment of the effects of drilling in the region? A village head in the Alkaleri Local Government Area of Bauchi State was complaining bitterly about what the effects of crude oil exploration might have on the environment. A road is being built close to where they live and he was worried about how much vegetation would be cut down for the drilling to take place.

 “The village head complained about the lack of development in the area and said the community did not even have schools. He wants the government to build a school and provide qualified teachers, so that their children could receive a decent education. He said it was in the interests of the community because their sons and daughters would one day take over the project’s operations. He called for societal development.”

Kolo said a thorough environmental impact assessment was of extreme importance.

“The government should take the lessons learnt from oil exploration activities in the 1950s and 1960s in the Niger Delta region before actualising the exploration of crude oil in the northeast, which is an entirely different region. The drilling will take place in a savannah and arid area. The government should take a critical look into environmental issues.”

Apart from the insecurity that had affected agricultural activities in the northeast, he said, the exploration of crude oil in the Kolmani River would definitely affect agricultural activities because, when establishing a refinery, gas processing plant and power generating plant, huge hectares of land and forests would have to be claimed by the government, which would be detrimental to agricultural activities.

Kolo said the exploration of crude oil in the Niger Delta region had led to a decline in agricultural activities.

The residents of Maiduguri told RNI that they were optimistic that there would be huge development in the northeast region now, which would boost the whole area.

Ibrahim Jibril Gulumba, a resident, told RNI that he was thrilled that the federal government had officially flagged off the drilling of crude oil in the region.

“We are optimistic that there will be a huge grant and employment for youth in this region just as had happened in the southern part of the country when drilling of crude oil started.

“Apart from crude oil, the northeast region is well known for its agriculture. Both activities will give the region a huge boost after 13 years of the insurgency when the region became a virtual no-go area. It severely affected the people of the region. Now we are hoping to bounce back in terms of human-capital development and reducing the rate of poverty and unemployment drastically.”

Alhaji Lawan Dauda said: “We are very grateful to [the president] for flagging off the crude oil drilling in our region. With the discovery and exploration of crude oil in the region, we hope there will be a lot of benefits and advantages, such as job opportunities, especially for those who lost their livelihoods in the insurgency. We expect much infrastructural development, too.

“Many believe that exploration and drilling of crude oil will be detrimental to agricultural activities, but I’m of the opinion that the drilling will not affect agricultural activities. There are different kinds of crude oil and the one we have here is not the same as in the southern part of the country.”

Dauda said that if the government decided to drill for crude oil in the Lake Chad region, there was a possibility it might affect agricultural activities. But he said the exploration was in the Bauchi and Gombe states not in Borno State or in the Lake Chad region where farming activities were well established and “capable of feeding the whole of Africa”.

“So, I don’t believe we will have a problem with it interfering in our agricultural endeavours.”


About the author

Mbodou Hassane Moussa

Journaliste de formation et de profession. Passionné par l'écriture, le digital et les médias sociaux, ces derniers n'ont aucun secret pour lui. Il a embrassé très tôt l'univers des médias et de la Communication. Titulaire d'une Licence en journalisme et d'un Master en Management des projets, Mbodou Hassan Moussa est éditeur Web du journal en ligne Toumaï Web Médias. Aujourd'hui, il est devenu Webmaster à la Radio Ndarason internationale et collabore à la réalisation du journal en langue française et dialecte Kanembou.