Nigerian President Muhammadu Buhari announced on Tuesday the discovery of a huge oil reserve in the north of the country that may contain more than a billion barrels of crude.
Buhari was on hand in a border region between Gobe and Bauchi state in the country’s northeast to launch a long-term drilling and refining project that he hoped could improve the country’s economy. The discovery and subsequent development of resources in the area is the first of its kind in northern Nigeria.
Nigeria is an OPEC member and was once Africa’s biggest oil producer, but its industry has suffered terribly under the aging Buhari, who was scheduled to step down from the top job in February. Buhari’s mishandling of terrorist threats such as the Boko Haram jihadist group, the roving Fulani “bandits” who have devastated Christian communities and stolen untold billions in natural resources and other criminal organizations has left the country with little interest in supporting the 79-year-old the old administration or his party, the All Progressives Congress (APC).
Nigeria has largely failed to exploit its vast natural resources, particularly oil, as a result of neglecting the refining facilities it has and not investing significantly in building more. The country has also experienced a wave of widespread oil theft in which unidentified “bandits” built illegal pipelines in the government’s pipelines and stole the oil from them, resulting in billions of dollars lost to the government.
In his announcement on Monday, Buhari said the Kolmani area where the oil was found is estimated to contain over one billion barrels and another 500 billion cubic feet of natural gas.
“This is indeed significant since efforts to find commercial oil and gas outside the established Niger Delta basin have been attempted for many years without the desired results,” the Nigerian said. Premium Times Buhari cites the newspaper.
“As a fully integrated on-site development project that includes upstream production, oil refining, power generation and fertilizers, the project promises many benefits to the nation,” he promised. “This includes, but is not limited to, energy security, economic security, food security as well as the overall socio-economic development of the country.”
Buhari also applauded himself and his government for attracting significant foreign investment, which he estimated at about $3 billion, in an oil and gas project “at a time when there is almost zero appetite for investment in fossil energy.” .
of Nigeria Everyday Trustwhich broke the news of Buhari’s planned visit to the Kolmani area on Monday, predicted that if the government manages to extract the said oil and it is not stolen, it could fetch up to 32 trillion naira, or about $72 billion .
“With about 1 billion barrels of crude oil reserves from the new northern oil fields, Nigeria is expected to gain close to $73 billion or N32.3 trillion at an average global crude oil price of $73 per barrel used for the 2023 budget proposal.” Everyday Trust was foreseen. “These gains could be realized over a 10-year period. depending on when commercial production begins.”
This newspaper’s report offered more details about the scope of the project, including plans to build a refinery in the area instead of simply mining and selling the crude. NNPC Limited, Nigeria’s major oil company, is said to manage the construction of a refinery and “build a power plant that will use the energy from the wells to generate electricity.”
Figuring out how to secure the oil so that criminals can’t steal it from storage tanks and pipelines will be critical to the project’s success. In southern Nigeria, where all of the country’s oil wealth was once located, organized crime syndicates have almost perfected the construction of clandestine infrastructure to steal the government’s oil. Last month, the NNPC disclosed that it had discovered an elaborate secret 2.5-mile pipeline embedded in a key export terminal. The secret pipeline has reportedly been operating for at least nine years, pumping oil and costing the NNPC about 600,000 barrels of oil per day.
In a separate theft operation, an NNPC official revealed in September that criminals had drilled 295 illegal taps in one of the company’s pipelines, stealing 95 percent of the oil at one terminal.
A study by a Nigerian Senate committee released on Wednesday found that Nigeria had lost $2 billion in stolen oil between January and August 2022. Nigeria’s Punch news agency noted, however, that the report “failed to name one person or a corporate entity that was carrying out the oil theft’.
The Senate’s estimate is much more modest than a similar attempt to quantify the theft by Premium Times which found in September that Nigeria had lost $10 billion to oil theft between January and July.
The thefts resulted in Nigeria losing its position as Africa’s top crude oil producer in May to Angola.
Oil thieves have also established networks of illegal oil “refineries” across Nigeria, creating huge security risks. In April, an explosion at an illegal “refinery” in southern Nigeria killed 110 people. The explosion was so big that it incinerated a nearby forest and many cars queuing to buy illegal fuel.
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