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Jubilations As Northern Nigeria Strikes Black Gold

–By Yange Ikyaa and Gideon Osaka

A Critical Analysis of Potential Socio-Economic Benefits and Challenges of Kolmani River II Oil And Gas Prospects.

Records indicate that oil was first discovered in Nigeria in the year 1956 at Oloibiri, in the present day Bayelsa State of the Niger-Delta region of the country after half a century of exploration.

Since then, the proceeds realized from the sale of the commodity have been the economic backbone of the country. Over the years, Nigeria has relied so much on oil in such a way that the country’s budget is always determined by the forecast of the global oil market price as a benchmark.

Considering the relevance of oil in the country’s economic survival, successive administrations have made efforts to expand the search for it to various parts of the country. In Bauchi State, for instance, oil was discovered and it is said that the oil deposits in this area have proven to contain associated gas in commercial quantities somewhere in Barambu Village of Alkaleri Local Government Area, based on seismic investigations.

However, recently, the Federal Government took a step further in its exploration plan in the area by commissioning the first phase of drilling operations.

Speaking at the flag-off ceremony, President Muhammadu Buhari said “exploration in our frontier basins is imperative to the economy of the country. I therefore have directed NNPC to intensify its campaign in the Chad Basin, to discover new hydrogen to extend the economy of the people within the region and the nation at large.

According to the President, “our next level is to ensure that exploration is extended to Chad Basin, Gongola Basin, Anambra Basin, Sokoto Basin, Dahomey Basin, Bida Basin and Benue Trough, for more prosperous Nigeria. This is because gas and oil remain critical to the present economic development agenda of our country and the future sustenance of the nation, as they remain key to the implementation of our budget at all levels of government.”

President Buhari commended NNPC for the exploration into Kalmani River II Well, which he said, will spur-off socioeconomic activities.

It could be recalled that Mr President’s association with hydrocarbon search started in Lake Chad as Federal Commissioner of Petroleum and Natural resources in 1976. That era led to the drilling of 23 wells, two of which were of gaseous content, where NNPC acquired 2,000 square meters of land in the basin. 

Currently, the President directed the Nigerian National Petroleum Corporation (NNPC) to extend its exploration to six basins in the country and has openly commended NNPC for its determination towards the actualization of the project.

Ward Head Musa Yaro

The Group Managing Director of the NNPC, Dr. Maikanti Kachalla Baru, said NNPC, in collaboration with a Chinese company, has discovered oil and gas in commercial quantity in the area, hence the beginning of the drilling exploration activity.

Dr. Baru commended the President for the support given towards the execution of the project which, according to him, was due to his strong determination to boost the oil sector.

He hinted that NNPC will soon extend the search for oil and gas to Plateau, Nasarawa, Adamawa, Taraba and Benue States.

The NNPC boss said security clearance is being awaited from the military in order to resume exploration of oil and gas in the Lake Chad basin, which has been suspended some years ago due to insecurity in the area.

 It will be recalled that prospecting for oil and gas in the Benue Trough of the Gongola Basin started about 20 years ago, but with disruptions attributed to politics of dichotomy.

Valuechain gathered that the search for oil in the Lake Chad Basin area of Northern Nigeria, which began more than 35 years ago, is yielding results as about 21 oil wells out of the 23 drilled so far are said to have the potential or full prospects of oil.

Oil search in the area had slowed down during the administration of former President Olusegun Obasanjo. However, President Buhari, on assumption office, made it a priority and following a presidential directive, often cited by Baru, the NNPC had resumed oil exploration and related activities in the frontier basins.

In addition to the need to increase the nation’s reserves, the exploration activities is been encouraged due the reality of discoveries made in neighbouring countries in basins with similar structural geologic settings as compared to those in Nigeria.

According to Valuechain findings, these discoveries include Doba, Doseo and Bangor, all in Chad amounting to over two billion barrels; Logone Birni in Southern Chad and Northern Cameroun, over 10 billion barrel; and Termit-Agadem Basin in Niger, which totals over one billion barrels.

In an interview with Valuechain, the chairman of Alkaleri Local Government Area, Alhaji Abdulkadir Hamman Futuk, commended President Muhammadu Buhari for flagging off the drilling exercise, saying that the project which is unprecedented in the state would also provide jobs to teeming unemployed people of the state.

The chairman however expressed his fears that the project may likely stop If President Buhari is not re-elected in this month’s (February) presidential election. He added that on its part, the local government authority under his chairmanship had provided 20 water boreholes in various communities, renovated several healthcare centers and schools within the last few years.

Academicians React to the Development

An Economist, Dr. Abdulmajid Jamal Abubakar, said that the recent discovery of oil in Alkaleri Local Government Area will no doubt boost the economy of not only the state but the country as a whole, thereby leading to employment generation for the teaming unemployed youths.

Dr. Abdulmajid, who is the Dean, School of General Studies, at the Abubakar Tatari Ali Polytechnic, Bauchi said, “Oil is one of the natural resources that Nigeria is proud of but, at least, we can look at it from two major angles, employment generation and increase in income.”

He added that, “there are many factories, processing firms, industries that will come on stream due to the oil activities and will employ people from those areas and beyond.”

According to Dr. Abdulmajid, ‘there will be improvement in employment generation because it is only when there is employment that those who get income will spend and, by spending, they will boost the market activities in those areas.”

The Dean, who said the oil activities will bring series of benefits, both economically and socially, advised government to incorporate sustainable development approach.

People of the community

He explained that oil exploration or drilling of oil has its own negative effects such as destruction of farmlands occasioned by spillage, as well as consequent community agitations.

Abdulmajid said, “it will destroy farmlands but what we should look after is if government will sustain the activity by embracing sustainable development standards, then we want the adverse effect to be less than the benefits, then we can say in summary that there is benefit. However, when the negative effect goes beyond the benefit, then we will say it is a useless venture. It is like taxing people N100,000 and paying the tax collector N150,000, you have to look for money to complete his salary. So, there is no benefit.”

 Also giving an insight to the oil activities in Barambu at his office, Professor Mohammed Bello Abubakar, the Director of National Center for Petroleum Research and Development, Abubakar Tafawa Balewa University (ATBU) Bauchi, said the drilling work has reached an appraisal stage from Kolmani River-I to now Kolmani River-II.

“The oil work has now reached an appraisal stage. The Nigerian National Petroleum Corporation (NNPC) is drilling Kolmani River-II Well and they have gone far with the work and the Center has the mandate on all aspects of petroleum, coal and other energies related to that.”

Professor Abubakar explained that, “the area as it is, we as geologists have categories or have grouped our locations geologically, so the area you are talking about falls within what we referred to as the Gongola Sub-basin of the Northern Benue Trough, some people call it Upper Benue Trough of Nigeria.”

 While expressing optimism on the oil prospect in Barambu, Professor Abubakar said normally, oil is found from sedimentary basins as indicated around 1999 towards 2001 where exploration activities that took place by the International Oil Companies (IOCs) such as Shell, the Chevron and  Elf.

He said when the three companies drilled three wells, one each, Shell reported presence of about 33 billion cubic feet of gas from the well they drilled in that Barambu area.

The Professor explained that the present drilling location is not more than 500 meters from the well drilled by Shell, where this particular kind of reserve or resource was identified.

“An indication of the presence of Petroleum system is the presence of hydrocarbon, even if it is a drop, whether it is gas or oil, once you have that, that indicates that other components, elements of the petroleum system existed in the place,” the university don explained.

According to him, the simple fact that Shell has discovered 33 billion cubic feet of gas from that area has already established the fact that there is a petroleum system in the place.

Abubakar called for more search of the area for NNPC to be able to discover something more than what they have already discovered. He commended government at all levels for the various roles played in the cause of the oil exploration and drilling activities going on in the area.

“It is commendable because anything you see happening anywhere, there has to be the political will to make it happen. If that will is not there, then nothing will move. So, the government is in the right direction, and as you know, Nigeria wants to grow its oil reserves from 37.2 billion barrels to 40 billion barrels and that means you have to explore for other areas that will make it possible and this is one of them.”

He said although government has tried in the provision of infrastructure, there is the need to put more infrastructural facilities on ground to enable more International Oil Companies to come and invest at the Barambu oil site.

The Community Calls for Farmland Compensation

Amidst ongoing oil activities in Barambu Village in Alkaleri Local Government Area of Bauchi State, the people of the area have pleaded with the Nigerian National Petroleum Corporation (NNPC) for compensation for their farmlands taken for the Oil and Gas exploration project.

 They said that their farmlands were taken with a promise that they will be compensated but not a dime has been given to any of them over one and a half years after when the promise was made.

 Some of the residents said they have been forced to stay without food because they no longer have farmlands to cultivate their crops.

 Ladi Naboth, who lamented bitterly as she spoke with press, said “we are in the village and not the city and they know our major occupation is farming, we cannot eat if we don’t farm our crops.

We plead with them to pity us and pay us the value of our farmlands which is being used for oil exploration. We are happy that this has been found in our locality and we will benefit from it but before we start benefiting from it, they should pay us so that we can have what to eat and survive.”

 She added that besides the compensation for their farmlands, they request that hospitals be built for them because “right now, if we have an emergency, such patient will have to be rushed to Gombe, Alkaleri, Bauchi or Pindiga. If we had a hospital or maternity, we won’t go through that.”

 According to her, she recently put to bed but when she was in labour, she had to be rushed to Pindiga on a motorcycle, a community which is several kilometres away from her home.”

 Naboth said that they have a school in the area but lacked teachers that will teach their children and they wished that their children were educated.

 Another resident, who gave his name as Haruna Adamu, said one of the oil wells was sited on their ancestral land but they have not been compensated.

 “These lands that were used for this exploration belong to us, they took them but they don’t regard us as anything. They have refused to give us any compensation for our lands that they took,” he lamented.

 Adamu, who described himself as a farmer and herder lamented that “we don’t even have work to do there, they don’t look for us to do anything for them where they are working. How can people come from outside and benefit from the wealth that was found on our lands but we don’t benefit from it?”

 He said that before their lands were taken, they used to cultivate maize, sorghum and millet “but up till now, they haven’t given us anything and, because of that, we couldn’t cultivate our lands as we are used to. We and our families are hungry; we have no food to eat. They should come to our rescue.”

 A worker with one of the contracting firms, who pleaded for confidentiality because he was not authorized to speak to the press, said in response to the plight of the residents that it was the responsibility of NNPC to compensate the communities for whatever was taken from them.

 According to him, “I am from the contractor’s side and I want to tell you that compensation is usually from the Frontier Exploration Services, a body from NNPC. What they do is they asked the contractor to work and they will pay the compensations afterwards.”

 He said he was worried about the plight of residents and hoped that they remained calm, assuring that “I know they will be paid not long from now.”

Speaking in an interview with Valuechain, the village head of Barambu, Abubakar Umar, said they have been paid compensation for economic trees that have been affected by the oil activities in the area, hoping that compensation for their farmlands would follow.

Umar, who said his community has the population of about two thousand people, explained that they were duly consulted by the government on the ongoing oil activities in the area.

He said that at the initial stage, some of his subjects wanted to relocate to other areas but he prevailed on them until when the drilling work commenced in earnest.

The village head appealed to the government to provide them with hospitals, schools, electricity and other infrastructure to enable them live a good life.

Also, the Ward Head, popularly referred to as ‘Mai Unguwa’ in the local Hausa language, in charge of Mai Madi Ward, Musa Yaro, said that lands affected by the oil activities have not been compensated, expressing hope that within no distant time, their plight will be ameliorated.

He expressed the community’s total support to government and to NNPC for the work, stressing that it will create job opportunities for the youths in the area, thereby reducing unemployment amongst his people.

Reaction From

Niger-Delta and Others

If this development continue to yield favorable result, will it put an end to the Niger Delta region’s agitation for resource control? These are some of the questions agitating the minds of Nigerians following the flag-off of oil exploration activities at Barambu town.

Nengi John, an indigene of Bayelsa State, believes that the Bauchi oil exploration programme is good for the north in particular and Nigeria in general.

“It’s good that oil exploration is a reality in the north. At least, that will assuage the quest of the north to be included as oil producing region. It’s also good that they have a feel of the challenges associated with oil production. By the time they experience spillage, they will be better informed about the Niger Delta complaints as regards environmental degradation,” he said. 

Perembei Abiye, an artisan living in Rivers State, sounded interrogatory in his opinion that “we are celebrating oil exploration in Bauchi. Nigerians have not been told whether it is in commercial quantity. However, I am waiting to see how the Federal Government will handle the issue of derivation, now that the north is involved. I am also waiting to see their reaction when next we agitate against the neglect of the Niger Delta region,” he added. 

Justifying exploration in the north, Gail Anderson, Lead Nigeria Analyst at Wood Mackenzie said, “there’s a heap of basins in that northern area, which, to be fair, are clearly under-explored. There’s definite potential and with insecurity in the Niger Delta, there’s a lot of sense in that, but again, if Boko Haram is active, maybe you wouldn’t want to go drilling in the northeast.”

Today, Nigeria’s government is focusing its exploration work in Bauchi and Gombe States, a safer distance from Boko Haram hotspots in and around Lake Chad. That means for now, oil production in the far northeast is a distant prospect.

“Similar campaigns in the past have failed to result in commercial finds, explained Aaron Sayne, a researcher at the New York-based Natural Resource Governance Institute. I’m sure it could be real, but it sounds like it’s a long way away,” said Sayne.

Trade Unions Call For Passage of PIB Bill

The leadership of Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association (PENGASSAN) have commended the Federal Government for the flag-off and official commencement of crude oil search in the Kolmani Well River-II. The duo also urged the Federal Government to expedite passage of the Petroleum Industry Bill (PIB).

According to a statement jointly signed by Comrade Francis Johnson, National President of PENGASSAN and Comrade Williams Akporeha, National President of NUPENG, the unions stated that “as key stakeholders in the industry, we urge and appeal to this listening administration to accelerate the final executive assent to the entire Petroleum Industry Bill.

“In this Bill, roles and accountability are better clarified; governance and transparency strengthened and inefficiency, maladministration, corruption and secrecy are accordingly tackled, these are quite important and must be upheld.

“We further believe that when passed, it would end unnecessary political interference in the sector and optimize value chain in the upstream, midstream and downstream of the petroleum industry, as well as separate the roles of the policymaker from the regulator and from the commercial institutions.”

Already, the Petroleum Industry Governance Bill (PIGB) has been passed by the National Assembly and is currently awaiting presidential assent, while the industry still waits the Petroleum Host Community Bill (PHCB) 2017, Petroleum Industry Fiscal Bill (PIFB) 2017 and the Petroleum Industry Administration Bill (PIAB) 2017.

Lessons From Oil Exploration In The Niger-Delta

However, if lessons are not learnt from the security challenges, environmental damage, economic sabotage, as well as deaths caused by oil production, through pollution, and the carnage of armed agitations by militants in the Niger Delta region, a worse scenario may play out in the north when full commercial operations commence.

In other words, if no proactive measures are taken right from inception as exploration activities heighten, the same crude oil curse in the Niger Delta may be repeated in the north.

In February 2018, the Federal Government said it has so far spent N243 billion in the implementation of the Presidential Amnesty Programme for Niger Delta ex-militants in the past three years.

Such huge expenditure could have been avoided had the government paid better attention to the region’s fundamental needs in years past, the absence of which resulted in radical and violent agitations in the region in the early 1990s.

Nigeria is Africa’s largest oil producer with an average production of 2.2 million barrels of oil a day, and the world’s eighth largest producer.

The bulk of Nigeria’s production has come from its riverine Niger Delta Region along the southern coast of the country.

Oil provides 95 percent of the country’s foreign exchange earnings and about 80 percent of its budget.

However, the occasional surge in militancy in the oil rich Niger Delta has often caused a tremendous shortfall in the daily oil production, which brought the country’s economy to its knees in 2016, sliding into a recession and exiting the economic crisis a year later.

The quest to increase Nigeria’s oil and gas reserves gave birth to oil exploration in the Chad Basin, the Benue Trough and the Gongola Basin, beginning about 30 years ago. These exploration efforts became intensified in order to cope better economically in times of oil installation sabotage in the Niger Delta.

In the last two years of the President Buhari led administration, major breakthroughs have been recorded in the oil search.

Experts opine that the current challenges hindering production activities associated with oil producing areas such as youth restiveness, hostage taking, pipeline vandalism, militancy, pollution, among others, were not envisaged at the beginning of oil exploration in the Niger Delta region, hence proper plans were not put in place to forestall or tackle such issues, in case they arose.

“This means that a deliberate government-community relation needs to be established in advance in order to get the buy in of host communities. This will make stakeholders in the petroleum projects being developed in northern Nigeria to appreciate the benefits of community engagement, while making host communities to own and safe-guard the projects or investments being developed,” one energy policy analyst told Valuechain on the condition of anonymity.

According to him, “the government must seize the moment ahead of time and sensitize the public in the northern geo-political zones, especially the prospective oil producing communities on the benefits of the on-going petroleum exploration in their environment.

“By so doing,potential investment opportunities available in the pre and post exploration period could be harnessed by host community populations.

“This will also create a platform for feedback gathering that will help government and private sector authorities in the Oil and Gas value chain in policy formulation and amendment, with a view to having successful and sustainable commercial business operations.

“It will also be an opportunity to prepare the minds of business minded people, especially the youth, to develop businesses, create jobs, eliminate idleness and forestall any chance of future restiveness,” and probably help Nigeria not to repeat the past mistake of crude oil curse in northern Nigeria.  

This could also help tame corruption, project abandonment and impunity, with respect to petroleum sector programmes or institutions, both public and private.

The minorities of the Niger Delta have continued to agitate and articulate demands for greater autonomy and control of the area’s petroleum resources. They justify their grievances by reference to the extensive environmental degradation and pollution from oil activities that have occurred in the region since the late 1950s.

During the 1990s these ethnic groups, most notably the Ijaw and the Ogoni, established organizations to confront the Nigerian government and multinational oil companies, such as Shell.

However, the minority communities of oil producing areas have received little or no currency from the oil industry and environmental remediation measures are limited and negligible. The region is highly underdeveloped and is poor, even by Nigeria’s standards for quality of life.

Sometimes violent confrontation with the state and oil companies, as well as with other communities has constrained oil production as disaffected youth or organizations deliberately disrupt oil operations in attempts to effect change. These disruptions have been extremely costly to the Nigerian oil industry, and both the multinationals and the Federal Government have vested interests in ensuring uninterrupted extraction operations.