Latest News

With Eyes On $400m Annual Exploration Fund, NNPC Pushes For Oil In Sokoto, Niger, Others

Published

3 years ago

January 3, 2023

Ireporteronline

With Eyes On $400m Annual Exploration Fund, NNPC Pushes For Oil In Sokoto, Niger, Others

The Nigerian National Petroleum Company Limited (NNPC) is pushing for more oil in the north, a move that could be made easier by the $400 million projected annual funding for the exploration of frontier basins under the Petroleum Industry Act (PIA).

New data obtained covering the national oil company’s frontier exploration activities between 2020-2022 indicated that some of the states in the north where the firm is hoping to discover oil include Sokoto, Nasarawa, Niger and Borno. Others are Yobe, Adamawa, Gombe and Bauchi states.

Outside the north, the Anambra basin was listed as another area where the NNPC is pushing for more oil, after a similar discovery of the commodity in Kolmani River 2 which straddles Gombe and Bauchi states.

According to the new PIA: “There shall be maintained for the purpose of this section, a Frontier Exploration Fund which shall be 30 per cent of NNPC Limited’s profit oil and profit gas as in the production sharing, profit sharing and risk service contracts.’’

Last year in the heat of the debate that followed the alleged discrepancy in funding of host oil communities in the Niger Delta and exploration of frontier basins, mostly in the north, as enunciated by the PIA, the Group Chief Executive Officer of the NNPC, Mallam Mele Kyari, revealed that about $400 million would be spent annually to fund exploration of oil and gas in the frontier basins under the new PIA. His projection was from the previous year’s activities in the sector.

When the sum, which is from 30 per cent of the proposed NNPC Limited’s profit from oil and gas, is added to the estimated $500 million to be spent on host communities, being the 3 per cent of operating expenditure approved by the Act, both cost centres would gulp a cumulative $900 million or roughly N450 billion every year, THISDAY learnt.

At the time, Kyari admitted that some of the misconceptions concerning the new law were due to the adoption of a wrong communication strategy, insisting that the 30 per cent exploration fund was not meant to explore oil in the north alone.

He said there were potential oil wells in the southern states, including Anambra basin, the Calabar embankment, as well as the ultra-deepwater areas of the Niger Delta.

“When you say profit percentage, it will probably come down to less than $400 million per annum. And, then, the other side of it is that 30 per cent is a big number, but when you come to the host community fund, you have three per cent of operating expense,” the GCEO stated while trying to douse the tension generated by the debate.

“What’s wrong in finding oil anywhere that you find it? Because once you find oil and gas, it becomes the resource of the federation, and therefore nobody loses from this participation,” he said in defence of the provision of the new law.

However, the latest NNPC document showed that 2D seismic acquisition has already been completed in the 700 Line Kilometre (LKm) in Sokoto basin and the 600 LKm in Bida basin where crop compensation payment has been rounded off and post-acquisition has reached 70 per cent on both sites respectively.

Related Topics:

Up Next

Gunmen killed PDP Leader, Three Others In Anambra

Don't Miss

2023: Don’t Vote On Ethno-Religious Sentiments, Church Leader Advises Christians