Questions over reported 1b barrel oil discovery in northern Nigeria
Nigeria’s exploratory activities in the country’s north and a purported discovery of one billion barrels of crude oil there are both causing grave concerns among stakeholders.
What are the concerns?
Stakeholders have raised questions about the development’s secrecy amid transparency concerns. More than a year after the news of the discovery of a billion barrels of crude oil reserve in the Gongola basin, which is situated between Bauchi and Gombe states, not much has been heard about the development. The absence of the details of spending by Frontier Exploration Services (FES), a subsidiary of the Nigerian National Petroleum Company Limited (NNPC) responsible for oil prospecting, in the NNPC’s recently released 2021 audited reports further raised questions over the purported discovery.
Does this mean the reported discovery is false?
That’s not clear. Reiterating the need for further oil exploration last year, Timipre Sylva, Minister of State for Petroleum Resources, reported the discovery of about one billion barrels of crude oil in the North East. “From the evaluation results that we are getting, the reserve that has been discovered in the North East is about a billion barrels”, Sylva had said. But while the Petroleum Industry Act (PIA) established a fund through which 30% of NNPC profits now go toward frontier exploration, the over 40 years of spending, estimated by some stakeholders to be more than $3b, has been kept from the public, along with crucial information on how the nation arrived at a one billion barrel discovery.
Some geologists, explorationists, and energy experts have expressed concerns over the viability and reliability of a one billion-barrel crude oil reserve in the region, with some suggesting that frontier exploration remained a northern political agenda. “For years, the government has been wasting scarce resources on frontier basin exploration without meaningful results. If indeed there is a find of one billion barrels in reserves in the North, why are oil and gas companies not scrambling for the acreages?”, Ameh Madaki, Managing Partner, BBH Consulting, said while questioning the reported discovery.