NNPC still misses the point about inland basin exploration

At different forums, the Nigerian National Petroleum Corporation (NNPC) has expressed confidence that the aggressive exploration of the inland basins being driven by the corporation would yield success with hydrocarbon finds in commercial quantity.

In October, when Maikanti Baru, group managing director of the NNPC received a delegation of the Nigerian Association of Petroleum Explorationists (NAPE) executives led by its President, Abiodun Adesanya, in Abuja, he said based on preliminary results from the exploration activities in the inland basins so far, especially the Benue Trough, there was a strong indication that commercial quantity oil and gas finds would soon be made.

Baru said almost 400 square kilometer of 3D seismic data had been acquired in the part of the Benue Trough that was earlier explored by SNEPCO and that similar work would be extended to areas previously explored by Chevron and Total.

“We are targeting these areas because we have seen that some of what they have done has some prospects, it is only that they did not drill deep enough. They also did not target the areas we believe, from the review of the seismic data, would have culminated into a find.

“So, we are reinvigorating that and soon we are going to start drilling some of the leads that we have seen to ascertain what prospects there are. And as we have pointed out, there is an indication that we could find some hydrocarbon, we believe that in the nearest future hydrocarbon will be found in commercial quantity”, Baru said.

NNPC is also pursuing aggressive exploration of the inland basins which include Anambra, Bida, Benue, Chad, Dahomey, Gongola, Sokoto. Though the NAPE president commended NNPC for faithfully implementing recommendations made at the association’s conference last year in the exploration of the inland basins, the purported professionalism being brought to bear on the exploration of the inland basins, and the steady and consistent approach to the campaign, it still fails to address the issues at the heart of the matter.

The risk in drilling in the north is heightened with the activities of insurgents. Worse still, economics does not favour an oil search in the north at this time – or anytime again because the cost benefit analysis show that it is not viable in the short and medium term. Already the NNPC has reportedly spent over N130billion on the effort.

Global oil market also show it is not favourable, in a world that is increasingly growing sated with oil, and prices have only managed a recovery, more volumes especially one coming at such a cost is not pragmatic.

Goldman Sachs, a leading global investment firm last year called on Nigeria and other developing nations to lower oil production taxes to remain competitive in a world where shale producers with 50 percent of their projects now short-cycle, marked by lower costs and fallen break-even costs have ramped production by 190 billion barrels in 17 years.

Shale producers are upsetting the global oil market order with speed to market advantages and outstanding production volumes expected to peak at 13 million barrels per day by 2030.Even if Nigeria were to become so prolific and can produce 3million barrels, a glut in the market has prompted OPEC countries to cap members supply.

France, the United Kingdom and other European countries, many who are car manufacturers are planning to give up diesel and petrol vehicles in about two decades from now as battery powered vehicles gain traction. Also more people are turning to renewable energies.

The north has vast human resources, the best sunshine in Nigeria, fertile land for agriculture and enormous mineral resources where the funds wasted in phantom oil search could have been better utilised.

ISAAC ANYAOGU