NNDC: Why oil search in North failed so far

[DT]

Oil exploration in northern Nigeria is being retarded by nonchalance of the Nigerian National Petroleum Corporation and the multinational oil companies involved in the project, the New Nigerian Development Company (NNDC) told Daily Trust.  NNDC is owned by the 19 northern states and is involved in the oil search project on behalf of the states.

It said in a written response to enquiries by Daily Trust on the state of the exploration so far that the multinationals failed to pursue the exploration in violation of the terms they agreed with the Federal Government in the 1990s.

Apart from this, NNDC's effort to explore the blocks allocated to it was being thwarted by the failure of the NNPC and the oil companies to provide it with data on previous work by the multinationals, the company said.

It said in the early 1990s, Shell, Chevron and Elf were awarded oil blocks in the Niger Delta on the condition that they conduct oil exploration in the North but they all abandoned the project after drilling only one well each.

"In the early 90's the Federal Government made it a policy that any company awarded a block within the Niger Delta must carry out exploration of an additional block in the Benue Trough. This is to encourage multinational oil and gas companies operating in Nigeria to venture into exploration of the Northern sedimentary basis.

"It was based on this arrangement, that acreages were slated in the Benue Trough for allocation along with the blocks in the Niger Delta to the multinationals to explore. One block was allocated each to Shell, Chevron and Elf in 1994. The policy has not yielded positive results as they abandoned the exploration program after they acquired few seismic lines (2D) and drilled one well on each of the blocks," the NNDC said.

It added: "Shell drilled one well (Kolomani River-l) on OPL 809, they reported that the hydrocarbon phase encountered in the well was essentially a gas condensate phase, estimated to have minimum gas reserve of between 33 to 100 billion cubic feet (bcf).

"Chevron also drilled a well (Nasara-l) on OPL 810; the result of that campaign was inconclusive, though some gas was encountered. However, in view of the absence of pollees on gas as at the time of the campaigns, all the wells were shut down and abandoned by Shell, Chevron and Elf respectively."

NNDC said the government made another effort during the tenure of President Olusegun Obasanjo by including the Northern sedimentary basins in the Nigerian 2005 oil bids round conducted by the Department of Petroleum Resources from 24 to 26 August, 2005.

"Due to the risk associated with the inland basins and for the fact that this was the first time the Federal Government included the Northern sedimentary basins in a bid round, there was no any other competitor beside NNDC that bided for the blocks in the Northern basins," it said.

The NNDC said another problem it encountered in the oil project in the North was inability to get the data on the progress made from the multinational companies and the NNPC.

"The data on 2D seismic could not be acquired from the previous operator of the block, Shell Petroleum. This is due to the fact that it will cost NNDC between US $1.2 million - $1.5 million and a time frame of 12 - 18 months to conclude the deal.

"Imposition of Damman Oil as a Local Content Vehicle (LCD) on NNDC is another problem. Despite the fact that NNDC had signed an MOU with Gazprom Nigeria Limited, the Nigerian subsidiary of Gazprom of Russia is yet to release the necessary data on the oil blocks OPL 810, 722 and 733 to NNDC to enable us see developments made on the three oil blocks," NDDC said.

NNPC responds to NDDC claims

When contacted for comments, spokesman for the NNPC, Dr. Levi Ajuonuma, said the corporation has made huge commitments for oil exploration in the North.

He said NNPC has deployed latest technology in seismic data survey in order to achieve result.

Ajuonuma added that oil exploration in the North is not for the benefit of a particular region but for the whole country and so it would be wrong to introduce regional sentiments into it.

(Read NDDC's brief in full on page 5)



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