Daily Independent (Lagos)
31 October 2008
editorial
A decade after major oil multinationals and the Nigerian National Petroleum Corporation (NNPC) terminated oil exploration activities in Nigeria's segment of the presumably hydrocarbon-rich geological formation known as the central African rift system, the Federal Government has decided that further prospecting has to be undertaken within the very basins and sub-basins where the earlier efforts had been unproductive. NNPC Group Managing Director Lawal Yar'Adua disclosed recently that the resumption, slated for last month, was to enable the prospector(s) try out advanced technology in analysis of seismic data. He was, however, not forthcoming on the identity of the prospector(s) and the issue of who is to fund such a capital-intensive enterprise.
For obvious reasons, a fresh exploratory programme for the Benue Trough and Chad Basin is desirable. The multinationals, namely, Shell Nigeria Exploration and Production Company (SNEPCO), Chevron-Texaco (now Chevron) and Elf Petroleum (now TotalFinaElf), who abandoned the exploration programmes, declaring that all they had were "dry holes," could very well have been half-hearted in their efforts, as their sights had been firmly fixed on offshore acreages and their other concessions in the Niger Delta. Some industry sources indicate that the farthest depth in any of the oil wells drilled was 3,000 metres, which is double the average depth at which crude was struck in the Niger Delta. The sources claim that the hydrocarbon-bearing sedimentary rocks in the northern basins are about 6,000 metres deep.
The case for further exploration is supported by the fact that the segments of the aforesaid rift system that lie within Chad and Niger, countries that have contiguous landmass with Nigeria, have since been discovered to have substantial deposits of crude oil, and commercial exploitation has been going on there. Oil prospecting in those countries had lasted for close to two decades, but the companies had remained steadfast in their belief that the geology of the territory held tremendous promise. Instructively, though, the cost of the prospecting activities had been borne by the oil firms, without any injection of funds by government.
In the fresh undertaking in Benue Trough and Chad Basin, what is of critical interest is how the Federal Government intends to have the operations funded. NNPC, it is known, had been there before on a solo effort that gulped tens of billions of naira, just as the afore-mentioned multinationals had undertaken the exploration programmes under Production Sharing Contracts (PSCs), whereby their operating costs were borne solely by them. A point that needs to be made is that the oil firms, ever desperate for fresh oil finds, could not have terminated their work programmes if they had the slightest shred of evidence of deposits of crude oil and gas. Again, the contention regarding depth of drilling (3,000 metres) is not very convincing because the NNPC, as a State-owned business outfit, could have proceeded in the exploration activities beyond the 3,000 metres at which its co-competitors halted.
With the Federal Government's well-known disinclination to business undertakings, as evidenced by its discontinuation of equity contribution (cash call obligations) to Joint Venture (JV) operations and the establishment of the Ernest Shonekan-led Infrastructure Concession Commission, among other major policy decisions, there cannot be any justification for it (Federal Government) to fund oil prospecting in Benue Trough and Chad Basin. Nigerians will not be fooled by any ploy intended to create the impression that the NNPC could source the required funds independently for whatever programme it might have designed for the fresh round of prospecting.
What is expected is that the authorities would employ the appropriate channels to communicate to interested firms in the oil and gas industry relevant information on the prospectivity of the aforesaid basins as well as Government's desire to provide necessary incentives toward exploration. A well thought out package of incentives will stimulate interest among oil firms around the world.
The focus should be to attract such firms with track records to the oil and gas industry, and have them deploy their own resources to the exploration enterprise. To do otherwise would be economically suicidal for a country that has emergencies to deal with, from collapsed infrastructure - impassable highways, disused railway system, epileptic power supply, non-functioning petroleum refineries, etc. - to severely degraded educational and health institutions. These areas of lamentable deficit require massive infusion of funds for upgrade and expansion to alleviate the sufferings of Nigerians and facilitate the revival of the industrial sector. Let the private sector take up oil prospecting, and Government direct available resources to enhancement of the quality of life of the citizenry.
Be the first to Write a Comment!
Copyright © 2008 Daily Independent. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
