Nigeria is expected to tap one billion barrels of crude oil from the first reservoir of Kolmani oil fields around Gombe and Bauchi states.
President Muhammadu Buhari kicked off oil drilling on the site today.
The oil exploration could reach 19bn barrels of crude with the discovery of more reservoirs. The country will also reap over 500 billion standard cubic feet of gas from the first reservoir with prospects for higher volumes of gas.
This is according to officials on the ground as well as the project profile published by the Nigerian National Petroleum Company Ltd (NNPC).
According to the profile, the Oil Prospecting Licence (OPL) 809 and 810 Production Sharing Contract, NNPC Limited is the Concessionaire of the blocks while NNPC Exploration and Production (NEPL), and the New Nigeria Development Company (NNDC) are the contractor parties.
These partners have a strategic partnership with Africa Oilfield Movers Ltd (AOML) Consortium to provide funding and technical capabilities for the integrated oil and gas development project and to be compensated from the contractor’s profit oil after commencement of operations.
The integrated development of the original exploration site (in-situ) along the Gongola Basin of the Upper Benue Trough guarantees evacuation and monetisation route for the hydrocarbon in the location, which eliminates the high cost and burden of building a crude/product pipeline.
“The first phase of the integrated development project, will entail an in-situ oil refinery of up to 120,000 barrels per day capacity, a gas processing plant of up to 500 million standard cubic feet per day, a power plant of up to 300 megawatts (MW) capacity, and a fertilizer plant of 2,500 tons per day.”
This is the second time President Muhammadu Buhari will be at the site after he was there in February 2019 where he flagged off the spud in of the oil wells.
On Tuesday (today), Buhari officiated the presidential flag-off of the Kolmani Integrated Development Project of OPLs 809 and 810 at the Kolmani field site.
In another phase of the project, there will be a Downstream Oil Terminal/depot for off-take and distribution of the white products coming out of the refinery and further development of the integrated project.
How Shell, Chevron abandoned well over little discovery
According to NNPC Ltd, the search for oil began in the 1990s when OPLs 809 and 810 were initially awarded to Shell and Chevron respectively as part of their frontier obligation under the PSC Agreement on Oil Mining Licenses (OMLS) 118 and 132 to help them recover their cost.
“These companies explored the acreages and drilled a well each in their respective blocks. Kolmani River-1 was drilled on OPL 809 by Shell and Nasara-1 was drilled by Chevron on OPL 810 as part of their minimum work programme obligation. But both companies reported sub-commercial discovery of hydrocarbon in their blocks.”
The International Oil Companies (IOCs) also complained of the landlocked location of the blocks which made it impossible for the export of any oil find. “Hence, the two oil giants returned the blocks to the regulator’s basket.”
In the Nigeria License bid round of August 2005 under President Olusegun Obasanjo, NNDC won the two blocks–OPL 809 and 810 on PSC basis with NNPC as the Concessionaire.
But the NNDC made several efforts to further explore the acreages for commercial findings without significant outcomes.
In 2017, the Nigeria Petroleum Development Company (NPOC) subsidiary of NNPC joined NNDC and NDPC engaged the services of Frontier Exploration Services (FES) Division of NNPC to acquire 30 seismic data over the Kolmani River prospects area.
Using state-of-the-art hydrocarbon de-quest for commercial hydrocarbon de-risking technologies, including Magneto- telluric technology, air-borne based stress field detection technology and micro-magnetic analysis (MMA) amongst others, FES went into an aggressive exploration to achieve commercial discovery in the basin.
This laudable initiative resulted in the maturation of several drillable prospects in the area and spud-in of the Kolmani River-II & III and subsequently Kolmani River-IV to determine the size of hydrocarbon find and explore deeper targets.
About eight months after Buhari flagged off the Kolmani oil find, precisely, on 10th October 2019, one of the reservoirs in the Kolmani River II well was perforated hydrocarbon started gushing to the well head.
“The first phase of this campaign in Kolmani area led to the successful initial discovery of one billion barrels of oil and over 500 billion standard cubic feet of gas with prospects for higher volumes,” NNPC stated.
In 2021, the contractor party represented by NPDC now NEPL of NNPC had a bid round and engaged Africa Oilfield Movers Limited (AOML) Consortium as the Strategic Partner for the integrated development of OPLs 809 and 810.