Home News Nigeria to earn N32 trillion from new northern oil wells

Nigeria to earn N32 trillion from new northern oil wells

36
SHARE

With an estimated 1 billion barrels of crude oil reserve from the new northern oil wells, Nigeria is expected to gain nearly $73 billion or N32.3 trillion at an average global crude oil price of $73 per barrel benchmark used for the 2023 budget proposal.

This earning could be realised over a period of 10 years; depending on when commercial production starts, Daily Trust reports.

At the moment, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said crude oil reserves were at 37 billion barrels. With 1bn oil and perhaps gas reserves coming from the Kolmani fields, Nigeria’s oil and gas reserves could shoot up higher.

Analysis of the current crude reserve shows that the reserve slightly grew by 0.37 per cent to 37.046bn barrels as of January, 2022, from 36.910bn barrels in 2021. Gas reserves rose by one per cent to 208.62 Trillion Cubic Feet (TCF) from 206.53TCF. It is expected that gas reserves could grow to 220TCF in less than 10 years and 250TCF afterwards.

The Nigerian Petroleum Development Company (NPDC), a subsidiary of NNPC Ltd, had drilled Kolmani River 2 well in 2019 and the Kolmani River 3 well in 2021. By September, 2021, NPDC began shopping for oil exploration firms that could develop the OPL 809 and OPL 810. According to its requirements obtained by Daily Trust, the firms will provide financial and technical services for the integrated development of the assets.

According to officials at NNPC Ltd, the oil field in Bauchi and Gombe axis will be developed by Sterling Global Oil on behalf of NNDC and NNPC Ltd.

The integrated development process of the project entails that NNPC will not only drill the crude there but also build a refinery that will process it into white products and also build a power plant which will utilise the energy from the wells to produce electricity. This is because at over 700km from the coast, export and utilisation options of the crude is tough.

At the upstream level, it was learnt that there will be reprocessing of about 738 square kilometres of high-resolution 3D seismic data that have been captured earlier for the prospects area. The developers will also engage in delivering the integrated field studies and development plan for the Kolmani Main and the Kolmani South East fields, which are the two prospect areas.

After this is done, the practical drilling and exploration begins and this is what President Muhammadu Buhari will be kick starting tomorrow according to NNPC officials familiar with the oil fields’ development stages. The process also entails actual production of oil and associated gas at the oil wells.

At the midstream level, NNPC and its partnering NNDC, will establish gas processing facilities and a power plant that could generate at least 150 megawatts (MW) of electricity around the oilfield.