News

In Order To Restructure Nigeria, Oil Should Flow From The North

Published

8 years ago

September 2, 2016

Good news came some months ago that President Muhammadu Buhari has approved the commencement of oil and gas exploration in the Chad Basin area of North-East Nigeria. This was made known by former Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr IbeKachikwu, November 2015, during a presentation to the Petroleum Club in Lagos, titled “On-going Reforms in the Oil Industry: Impact of NNPC Reforms on the Nigerian Economy”. The good news did not come without Dr Kachikwu revealing to us that we would need to push a very moderate amount of $20 billion into the operation in 2016, for the Northern oil to flow.

Small amount you would say. Exploration of crude in that region of Nigeria is earnestly on-going, while the man who brought the good news, Dr Kachikwu, has since fallen out of that exalted seat of Group Managing Director of the NNPC, being a casualty of North/South dichotomy, or shall l say, a victim of not being eligible to manage oil-flow anticipated from the North? Then, on Tuesday, August 9, 2016, the news erupted that “NNPC considers crude importation from Chad, Niger Republic for Kaduna Refinery”. The consideration, according to investigation, was “part of addressing frequent disruptions to the supply of crude oil to the Kaduna Refinery and Petrochemical Company, KRPC, as a result of the Niger Delta militancy”. But for this consideration to be operationally effective, investigation further revealed that there would be need to “refit the Kaduna Refinery to be able to process Nigerien and Chaidian crude grades”. It may interest all to know that the Kaduna refinery was originally designed to refined 60,000 barrels of light crude per day but the refining capacity was later increased to 110,000 barrels, to enable it process paraffinic-based crude oil from Venezuela, Kuwait and Saudi Arabia.Yet, there must be additional “refitting” to enable the refinery [Kaduna] refine crude from Chad and Niger Republic because “crude from these two countries are of different specific from the light Bonny [Nigeria] or the paraffinic-based crude from Venezuela, Kuwait and Saudi Arabia”. Two things must be instructive here though. First is the fact that such “refitting” at the Kaduna Refinery [if it will be carried out] shall attract some money, maybe within the region of “few billion” American Dollars. The second being the reality that while these changes may go for the Kaduna Refinery [because of Northern oil pursuit] there is no equivalent consideration of “refitting” for all the refineries based in the South/South region of the country. Another revelation on the must-flow-of-Northern-oil came out most recently again. This was when the new GMD of the NNPC, DrMaikantiBaru, disclosed to a delegation of the Benue State Government that paid him a courtesy visit in Abuja that: ”President Buhari has directed the NNPC to begin to search for crude oil and gas from the Benue Trough with immediate effect”.Dr Baru added that “the President’s directive was part of efforts by his government to guarantee energy security for the country, through oil and gas mining from other parts of the country outside the Niger Delta”. The position of this writer is not about the “Northern oil and gas” flowing or not –oh, we need the Northern oil and gas for all purposes and intents. It is not also about a President’s desire to “improve the country’s economy by delving into voyage of discovering”, including search for Northern oil and gas. It is not even about the economy of achieving the targeted goal, though we cannot but reminiscence a little about the cost implication, in America Dollars of course, of achieving the pursuit. My concern is essentially about “the desperation of the search for this Northern oil and gas” on one hand, and how achieving the goal [striking the oil] could help in the speedy realisation of Nigeria’s restructuring, which is long overdue. But first, let us look briefly at the cost implication of the search, using similar searches in the past as a template. Our most beloved President Buhari, having being around the Nigerian oil industry, both as operator and administrator for years, knew well enough that search for oil and gas, in this same Benue Trough, commenced during his tenure as Military Head of State in 1984. In 1993, three oil giants namely: Chevron, Shell and Elf were even allocated oil blocks under a Petroleum Sharing Contract for non-existing oil, purely in anticipation that large quantity of crude would be discovered while the search was seriously on within the axis of Bauchi, Gombe and Borno. A 2001 Senate Committee on Petroleum, headed by Senator David Brigidi, confirmed, not only why the oil companies pulled out from the Trough [lack of oil even after drilling 3,000 metres] but that the wasteful exercise caused Nigeria a whopping $378,977,248.02. If we are to probe into the future search for oil within this same Benue Trough, using the past as road map, we do not need a soothsayer to know where we are heading again – a voyage to doom. Unless the long-awaited Nigeria’s restructuring is anticipatively dependant on the flowing of the Northern Nigeria’s oil, the question of this desperate search for Northern oil, in this secretive and manipulative manner, shall remain a suspiciously burning issue. Mr President is advised, in view of the above, to take it easy please.