Adesanya: Cost of oil exploration in North must be controlled, transparent

Adesanya

Chief Executive Officer of Degeconek and former President of the Nigerian Association of Petroleum Explorationists (NAPE), Abiodun Adesanya, in this interview with KINGSLEY JEREMIAH, spoke on the implications of ongoing exploration activities in the North, expressed optimism about the prospect of a positive outcome, as well as cautioned on cost management and security.

President Muhammadu Buhari appears unrelenting in his search for oil in the northern and other inland basins, a plan, which he initiated in the 1980s. How do you see this initiative?
I THINK President Muhammadu Buhari is strategically placed in history because it was the period when he was military Head of State that a drilling rig moved to the Nigerian side of the Chad Sedimentary Basin for the first time to commence oil exploration.

Again, he is repeating the same feat after a long pause in another northern sedimentary basin – the Gongola Basin. So, I think he is historically and strategically placed.

The second point is that in his speech during the flag off of the drilling campaign in this basin, he mentioned that 23 wells were drilled in the Chad Basin out of which two tested gas.

Once the science, data and petroleum system exists in any basin, then there could be justifiable arguments to conduct exploration projects in such basins. It is another matter though whether it is in commercial quantity or not.

What advantages do we have in this renewed drive?
The difference between the earlier drilling campaign and the current one is that science and technology have advanced and are being utilised. We have tools now that can enable us to look with a higher degree of certainty compared to before.

So, the other difference is that the choice of drilling locations then did not follow the acceptable procedure –kind of random.

However, this time around, the NNPC is utilising the global acceptable best practices and seasoned professionals to drive this exploration efforts. They are also reasonably subjecting their work to peer review by other professional colleagues. All of which were intended to de-risk the drilling for them to have a positive outcome.

Another important point to consider is the issue of costs. The NNPC needs to be cost-control conscious this time around and transparent unlike the previous campaign.

Compared with Niger Delta, can you hazard a guess of the estimated cost of these projects?
There are a number of infrastructure that are not available in Gombe and Bauchi area, but abundant in the Niger Delta area. For example, most service companies have their operational bases in the Niger Delta region.

So, one can expect significantly high mobilisation cost for the several heavy equipment, materials, personnel cost, transportation, rentals and hiring of offices etc.

Airlines would begin to fly regularly to that area, and there is also the possibility of higher drilling costs because geologically, they are drilling most likely through older and harder rocks requiring changing drill bits more frequently compared to what is used in Niger Delta because drilling depth is directly proportional to cost.

So, that is why you hear them say that the depth they are going to this time around will be deeper. What they did before was less than 10, 000ft. This one is going to about 15, 000ft. Therefore, the price tag could be expected to be higher, and this justifies why stringent cost control measures must be put in place.

When you drill and find oil or gas, further work is necessary and this would require another set of service providers to be mobilised and they will go through same process.

On the average, not less than 26 different services work typically on land rigs. So, it goes without saying that all these activities would contribute positively to the economies of the area where work is going on.

At that particular location, electricity generators will power the rigs, accommodation areas and all other services. This will therefore give room for huge diesel consumption.

Similarly, there will be explosion of collateral economic benefits in that area. Therefore, I would not be surprised if the cost is higher than average onshore Niger Delta costs.

Many think there is a sectional agenda in this drive. Do you agree?
This is a political question and please note that I am not a politician. I am a petroleum geoscience professional and I operate along that line.

What I know is that the current exploration effort makes sense, and is in national interest – period! You must not forget that there are other sedimentary basins in Nigeria and if the current efforts are sustained, we would see similar exploration attempts to find oil and gas in other sedimentary basins of Anambra, Benue Trough, Bida, Chad, Dahomey, Gongola, Sokoto and Yola.

It is also important to bear in mind that the names of these basins have no bearing whatsoever with administrative names. For example, Anambra Basin covers parts of Edo, Delta, Anambra, Enugu and Kogi states. The Benue Trough covers Kogi, Benue, Nasarawa, Plateau, Taraba and Adamawa states.

Gongola Basin underlies Bauchi and Gombe states, while Yola Basin largely covers Adamawa and Taraba states. Bida Basin infringes on Kwara, but mostly in Niger State. We have Dahomey Basin, which is part of Ogun, Lagos and Ondo states and there are offshore areas. 

An exploration programme would have to be developed for each of these basins. So, I do not see this as any sectional agenda at all.

Do you foresee any security challenges as the case was in the Chad Basin?
I don’t pray for more. Boko Haram has stalled work in the Chad Basin already and we have our hands full with all sorts of security challenges in other areas. Definitely, everybody has to be security conscious. Oil companies and service companies will not like to operate in areas where there are security issues.

Also, there has to be serious local education to create awareness. Oil accumulation does not respect administrative boundaries. So we do have situations where oil and gas fields straddle block and state boundaries.

There are indications of gas find in that region. Should gas be discovered in commercial quantity, what is the implication?

The first thing to do is to determine the gas chemical composition, then build a gas processing plant to separate the gas into different products. This will pave way for what to do with the gas, like building power generation, ammonia or fertiliser plants, or LPG loading bays. All the uses would be for local consumption.

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