Oil Search - FG, Northern States Sign $160m Mou
9 Aug 2006
Author: Sopuruchi Onwuka, Erasmus Alaneme
UNDETERRED by several years of failed efforts, the Northern states yesterday signed a production sharing agreement with the Ministry of Petroleum for oil and gas exploration and production in the Chad Basin and Benue Trough.
Nasarawa State governor, Dr Abdulahi Adamu, who signed the agreement for the states said the north would collectively muster some $160 million or N20.8 billion to fund the venture.
The development came even as the Minister of State for Petroleum Resources, Dr Edmond Daukoru, decried militant activism in the Niger Delta, lamenting that hostilities against oil industry operators in the area has caused deferment of 600,000 barrels of oil production per day at a time export prices are above $75 per barrel.
He declared that government would no longer negotiate with the militants or pay them ransom for kidnapped oil workers, saying the strategy had failed to yield enduring resolution to the crisis.
While signing the production sharing agreement with the ministry, Governor Adamu expressed optimism that production of oil and gas in the north would help douse the tension in the Niger Delta.
Gov. Adamu said the ceremony was historical, against the background of the belief by the northern states for over three decades that they could do something to contribute to the economic development of the Federal Republic of Nigeria, pointing out that the perception of the presence oil and gas in some parts of Northern Nigeria had persisted for about four decades.
He said it was to the credit of President Olusegun Obasanjo's administration that the historic event was taking place adding that this is a further testimony to the Federal Government's commitment to broaden the economic base, to broaden our ability to generate wealth and to take heat off from flash points across the country and make it possible for us as I keep saying to get more and more things for the country.
"So instead of us fighting each other on how to share the national cake as it is said, it is our hope and prayer that this effort which we are initiating this day will by the grace of God metamorphose into a very worthwhile venture to the benefit of Nigeria".
It would be recalled that the northern states through its commercial outfits, the New Nigeria Development Company (NNDC) last year in Abuja won the bids for four oil blocs namely: OPL 722, OPL 723 in the Chad Basin and OPL 809, OPL 810 in the Benue Basin and had paid the license fee of $511,000 for each of the four blocs.
In his reaction, the Minister of State for Petroleum Resources, Dr Edmound Daukoru said that the Chad and Benue Basin blocks won by the northern states was the biggest by one company in the country.
Daukoru pointed out that the country was looking forward to the first oil production from the northern part of the country, adding that other states like Ondo, Delta, Edo, Bayelsa, Rivers and Akwa Ibom were also getting ready to get oil blocs and keep it in trust for their citizens.
On the persistent problem of vandalisation in the creeks of the Niger Delta, the minister said that it had remained a bad one which the country was paying dearly for.
He said that whenever the problem arises the government has always taken a pragmatic step believing that maybe what the people involved need is some kind of inconveniences but have realized that it is not yielding a long and lasting solution.
According to him, "The Chanami Creek, that has always been a problem, but whether it has to do with MEND or not is not the issue. The part of the problem is that each time there is a problem, we took a pragmatic view that maybe all they need is some kind of inconvenience but that is not giving a lasting solution to the problem because the more you do that, the more they attempt to keep trying to tamper with the installation so that they get paid off.
"So we are going back to re-think the whole thing because the Chanami Creek thing indeed is a very sad story".
The minister pointed out that Kaduna and Warri refineries were no longer receiving feeds because a few people were holding the country to ransom by sabotaging the pipelines. He said this accounted for the high import level of the country.
"At this time when the product's price is sky high, over $78, it is a shame that these two refineries that should be contributing to local production are not in full production. We are losing about 600,000 BPD to the problem in the creek", he added.
In his speech, the Group Managing Director of the Nigeria National Petroleum Corporation (NNPC) Funsho Kupolokun congratulated the NNDC for the historic event, promising the assistance of the corporation towards making the dream of oil exploration in the northern part of the country a reality in the very near future.
Kupolokun said that the NNPC has since the 1970s being involved in activities of possible oil exploration in the northern part of the country most especially given that other countries have found oil in their own parts of the Chad Basin.
He disclosed that though the activities of the NNPC with technologies of about 25 to 30 years were good and acceptable, the current technologies available to the corporation and the result of the consultation work given by the NNPC showed that prospective areas of oil exploration abound in the northern part of the country and only needed a more definitive work to open up.
Daily Champion reports that the latest attempt by the NDDC to search for oil and gas deposits in the Chad basin is coming after oil majors including Shell, Chevron and Texaco failed to make any commercial find in the area.
Earlier exploration attempts in the Chad Basin were encouraged by result of seismic surveys which suggested similar geophysical structure with other sides of the Lake Chad where oil has been found in commercial volumes.