NNPC To Resume Exploration In Kolmani in Northern Nigeria

The Nigerian National Petroleum Company (NNPC) Limited, on May 13, announced plans to resume exploration activities in the Kolmani Oil Field.

NNPCL GCEO, Bayo Ojulari, has announced plans to resume operations at the Kolmani Oil Field in northeastern Nigeria.

The Kolmani River region straddles between Bauchi and Gombe states. On November 22, 2022, former President Muhammadu Buhari inaugurated the Kolmani oil drilling project.

This marked the first-ever crude oil exploration in northern Nigeria. However, logistical challenge, security challenges in the region, and COVID-19 pandemic disruptions stalled the project.

After nearly two years of inactivity at the site, NNPC is set to resume exploration at the Kolmani oil field.

In October 2019, NNPC announced the discovery of oil and gas deposits in the Kolmani River II Well on the Upper Benue Trough, Gongola Basin. In 2022, the government commenced commercial oil drilling in the area.

Preliminary findings indicated that the field contained about 1 billion barrels of crude oil reserves and 500 billion cubic feet of natural gas.

Fast Facts: Kolmani Oil Project

• Location: Bauchi & Gombe States
• Estimated Oil Reserves: 1 billion barrels of crude oil
• Gas Reserves: Over 500 billion cubic feet
• Key Partners: NNPC Ltd

Rationale for NNPC’s Exploration in Kolmani

NNPC’s decision to resume exploration in the Kolmani oil field is driven by economic, energy, and geopolitical reasons.

Nigeria has struggled to meet its OPEC crude oil production quota, due to oil theft, underinvestment, and aging infrastructure in the Niger Delta.

Thus, by exploring oil and gas in the Kolmani Basin, NNPC aims to diversify its production sources and boost daily crude output. Exploration in Kolmani oil would also encourage investment in frontier basins like the Anambra Basin.

Challenges to Kolmani’s Development

Despite its potential, the Kolmani project faces several hurdles

Northern Nigeria, especially the Northeast, is prone to banditry, terrorist attacks, and communal conflicts. Therefore, to ensure the safety of workers and infrastructure, the government may need to deploy security personnel to protect oil installations.

The Northern region is largely an agrarian society with limited industrial activities. The development of Kolmani would spur infrastructure development in the region.

Furthermore, the Petroleum Industry Act (PIA) 2021 empowered NNPC to explore for oil and gas deposits in frontier inland basins like the Anambra and Gongola Basins.

The Kolmani region lacks the critical infrastructure necessary for oil and gas operations. These include pipeline networks to transport crude to refineries or export terminals.

Due to their rugged terrain and lack of existing oil infrastructure (pipelines and export terminals), inland basins like Kolmani will require higher capital expenditures than coastal or offshore fields.