allAfrica.com: Nigeria: Oil Exploration - Gazprom Revives North's Hope (Page 1 of 2)

Years after the search for petroleum deposits in the North appeared to have been jettisoned, a new effort is on to explore gas resources believed to be abundant in the area.

There are indications that a bright ray of light is appearing in northern Nigeria's quest to harness the oil and gas resources believed to be abundant in the region's sedimentary basins, which comprise the Middle and Upper Benue Trough, the southeastern sector of the Chad Basin, the Mid-Niger (Bida) Basin, and the Sokoto Basin.

This follows efforts by the New Nigerian Development Company (NNDC), which has so far spent N400 million on oil and gas exploration in the Lake Chad Basin and the Benue Trough. According to the Group Managing Director of the NNDC, Alhaji Aliyu Alkali, the company has been involved in exploration for the past two years when it bid for and won licences for four oil blocks, two each in the Lake Chad Basin and the Benue Trough.

"Our exploration activities have been on for the past two and half years when we bid for and won four oil blocks; two in the Benue Trough and two in the Lake Chad Basin," he told Sunday Trust.

The company reportedly budgeted $70 million (about N8.1 billion) for oil and gas exploration.

According to Alkali, NNDC is already in talks with a Russian company, OAO Gazprom and Australian Anzion Energy Limited on the prospect of exploration in the Benue Trough which has been found to have a large quantity of gas reserve.

"We have been discussing with different groups who showed interest in what we are doing but they are waiting for necessary data on what have been found in those oil blocks," Alkali said.

The gas reserve, he said, can power an independent power project (IPP) capable of supplying 20 megawatts of electricity daily for 20 years.

Alkali also said that in addition to the IPP, the North in particular and the nation in general stand to benefit from the Benue Trough gas reserve in the form of fertilizer plants.

"If the potential of the well to be drilled is higher than what we expect, nothing stops us from starting a fertilizer company there in addition to the IPP. But what we have in mind now is to establish an IPP that would benefit the country as a whole, serve as a source of income for the country, alleviate the poverty of the people living around the area and provide the much needed energy to drive our industries back to life," he said.

Alkali lamented the lackadaisical attitude of the Department of Petroleum Resources (DPR) to the project which, he said, has resulted in delaying its exploitation.

"We can establish the IPP within 18 to 24 months if other things are ready and there are no regulatory constraints. But with the current foot-dragging of DPR, it is difficult to estimate when the projects would become reality," the GMD said.

The NNDC, Alkali said, started discussions with Gazprom some weeks ago. Gazprom confirmed last month that it was in talks with the federal government over plans to develop the gas sector in different parts of the country.

In what is seen as a strategic move in the global fight for Africa's energy assets, both the government and Gazprom said that they were discussing a proposal under which the company would offer a package of investment in the energy sector.

The Group General Manager in charge of Public Affairs of the Nigerian National Petroleum Corporation (NNPC), Dr Levi Ajuonuma, confirmed the FG-Gazprom talks to Sunday Trust on Friday. He said based on the plans, the Russian group would gain a foothold in some of the biggest gas deposits in the country, including some abandoned reserves in the North.

Speaking to Financial Times last month, President Umaru Yar'Adua's special adviser on petroleum, Mr Emmanuel Egbogah, said that Gazprom is offering to spend "significant numbers" of billions of dollars on a project with Suntera, a Russian-Indian energy company, to harness gas to generate electricity.

"I think they are looking at the overall scenario of gas competition and the world market, and Europe in particular. I think their approach is to position themselves to be quite relevant in that market," Egbogah said.

Oil exploration in the North began in earnest in 1987, when the NNPC started drilling in the region, but it was stopped in 1999. Areas covered during the exploration included parts of Bauchi, Gombe and Borno states. Although the NNPC was reported to have found wet gas in only one of 23 exploration wells and three other multi-national corporations who were also drilling for oil in the region were said to have found no commercially viable deposits, political undertones were suspected to have informed the suspension.

The NNPC maintains that a total of 28 exploratory oil wells have been drilled outside the Niger Delta area, all showing various levels of prospectivity. These wells, the corporation says, include one discovery well in Benue state and 24 wells in the Chad Basin. "However, production is yet to commence from any of the wells," the corporation says on its web site.

web allafrica.com	Enter your search terms	Submit search form
OR subscribers use AllAfrica's premium search engine


Use our pull-down menus to find more stories

Today's Most Active Stories