• Exploration, production in north stall
• $3 billion Kolmani project abandoned
• Stakeholders demand transparency
Over 55 oil licences across oil blocks in the Niger Delta will expire before the end of 2025 with affected operators yet to know the fate of their assets.
This comes as the prospect of oil production in the northern region lingers two years after former President Muhammadu Buhari flagged off commercial production at a $3 billion Kolmani Integrated Development Project.
While Nigeria’s rig activity peaked in the middle of last year, with active rigs increasing from 29 in January to 38 in July and August before stabilising at around 37 through November, the drilling activities at the Ebenyi-1 Exploration Well in Nasarawa state, which was stalled due to issues with the hole and equipment breakdown, has not made serious progress.
The rig at the site, Ikenga 101, hired from Drillog Petro-dynamics was redundant as of November.
At the Wadi well in Bauchi/Gombe, where NNPC is drilling with ACME Energy Integrated Services’ Acme Rig 5, the rig remains on standby as the licence for the block expired and is being processed, according to details of rig disposition published by the Nigerian Upstream petroleum Regulatory Commission (NUPRC).
All 41 petroleum prospecting licences (PPL) licences awarded to Nigerian companies under the marginal oil field licensing round of 2022 face possible revocation as they will expire this year along with others.
Going by the momentum gathered under the Buhari administration, which current President Bola Tinubu promised to sustain after over 60 years of state funding, Nigeria is meant to produce about 50,000 barrels of crude oil per day from the over one billion barrels of crude oil reserves said to have been discovered at the oil 809 and 810 in the Gongola Basin of the Upper Benue Trough.
Licensing cycle allows the government to revoke or renew oil blocks, a development that is raising concerns about the future of existing licensees amidst ongoing regulatory overhaul.
Some of the licences affected are Sahara Energy’s OPL 228, Oando’s OML 131 in the deep offshore and OPL 289, managed by CleanWaters Consortium in the deepwater.
Various PPLs tied to oil blocks in the Niger Delta will expire on June 27, 2025. These include licences held by Erebiina Energy Resources for the Emohua field, Suntrust Atlantic Energies (Egbolom field), Ardova Plc (Olua field) and several others across OMLs 22, 23, 25, 29 and 30.
The licences involve partnerships and equity arrangements among companies, such as Omega-Butler Marginal Fields, Intessa Energy and Petrodev Oil and Gas, with varying stakes.
This applies to OMLs 33, 40, 42, 43 and 46, with operators like Matrix Energy, Naphta Global and Energia Ltd managing fields such as Igbomotoru, Abiala, Atamba and Korolei.
On OML 49, fields offered to operators like Deep-Offshore Integrated Services and Multiplan Nigeria are also affected, while blocks like OML 53 and OML 62 where Hilltop Global Oil and Gas, Tulcan Energy Resources, Virgin Forest Exploration, Platform Petroleum and Tempo Energy operate will also expire.
Another licence expiring in June is Sigmund Oil Field Ltd, operating under PPL 228, which oversees the Ajaketon field in Block OML 63 through Sigmund SPV Ltd. Bilisco Multifacet Ltd holds a minority equity share of 10 per cent in the asset.
Fields under OML 67 where Northwest Petroleum & Gas Company Ltd manages the Ede field under Ede Exploration and Production Ltd while Metropole Petroleum & Gas Ltd operates the Edi field through Edi Exploration and Production Ltd will also expire.
Ndibe field on OML 67, Ekepkep field, PPL 236 and Dutchess Energy Ltd managed the Udibe field on the same block under Dutchford Exploration & Production Ltd will also expire in the year.
Aries Petroco Resources Ltd, under PPL 238 in the Nkuku field in OML 70 through NK 70 Development Ltd, and the Obira field managed by MMB Petroleum & Chemical Company under PPL 239 is due for renewal as well.
In Block OML 90, Torxen Energy Resources Ltd operated the Kaka field under PPL 241, Accord Petroleum Exploration and Development Ltd managed the Mesan field through Mesan Energy Ltd, with Norton Engineering Ltd holding equity stake, A.A. Rano Nigeria Ltd, under PPL 245 in the Oloye field in OML 95 along with Acrete Petroleum Ltd as well as Ruta field in OML 95 under Inland Basins Ltd (PPL 246) and the Bita field in OML 95 under Pioneer Global Resource & Integrated Energy Ltd (PPL 249), with Odu’a Investment Company Ltd holding a 48.76 per cent equity stake, is nearing expiration.
Other licenses set to expire later this year include PPL 250 at the Olomu field in OML 95, operated by Troilus Investments Ltd, and PPL 251 at the Meta field in the same block, managed by Akata Energy Ltd. MMB Petroleum and Chemical Company Ltd’s license for the Usoro field in OML 100 under PPL 252, Casiva Ltd’s PPL 253 for the Ikong field, and Petraco Oil Nigeria Ltd’s PPL 254 for the Ibiom field in the same block are also affected as well.
Net-Work Oil & Gas Ltd operates the Akamba/Mfoniso field in Block OML 102 under PPL 255 through Shafnet Exploration and Production Ltd, which is also affected by the upcoming expirations.
While the Nigerian National Petroleum Company Limited (NNPC) submitted a plan to NUPRC proposing exploration activities for 33 oil blocks in the Chad basin, Bida, Sokoto, Benue Trough and Anambra basins, most industry experts are not convinced as they described the exercise as rather political.
Currently, most oil companies across the world are moving to Namibia where huge discoveries by TotalEnergies and Shell have turned the African country into a hotspot for oil and gas investment. However, the situation in Nigeria is different as the NNPC and NUPRC are unable to provide answers to industry stakeholders and media to substantiate the data and activities in the basins.
While most IOCs are divesting in Nigeria, ExxonMobil, which is exiting the shallow water in the country, is expected to begin exploration in Namibia’s frontier basin similar to Nigeria’s.
U.S. oil giant, Chevron, is also ready to kick off operations in the country.
The concern for most industry players, especially explorationists, is that the state oil company, which is spending the country’s scarce resources in exploring for oil, has been rather discreet over the development in the inland basins instead of opening its operations and data for scrutiny in line with standard practice.
With about 30 per cent of NNPC profits already said to be spent on frontier basins, Nigeria may have spent about $1.2 billion in three years after the passage of PIA.
The Group Chief Executive Officer of NNPC, Mele Kyari, had earlier said 30 per cent of the NNPC profit would stand at about $400 million per year.
Former President Buhari had in 2020 announced the discovery of one billion barrels of crude in the Kolmani River II Well on the Upper Benue Trough, Gongola Basin as his government projected about 19 billion barrels of crude with the discovery of more reservoirs. However, the finding remained unverified as the country’s crude oil reserves remained the same.
Before exiting office, Buhari had flagged off the Kolmani Integrated Development Project between Bauchi and Gombe, saying that a $3 billion investment was attracted for a fully integrated in-situ project comprising upstream production, oil refining, power generation and fertiliser.
The Governor of Gombe State, Muhammadu Inuwa Yahaya, had hinted that nothing was going on at the site as he asked President Tinubu to intervene in the stalled Kolmani Integrated Development Project.
A geologist and publisher, Toyin Akinosho, had described the development in the frontier basin as a scam, stressing more convincing evidence is required.
A member of the Nigerian Association of Petroleum Explorationists (NAPE), who pleaded anonymity said while exploring for oil in the inland basin is not bad, the secrecy around what should have formed a topic for discussion across summits and academic gatherings is disturbing.
The source decried the secrecy around the project projects.
Director of the Institute for Oil, Gas, Energy, Environment and Sustainable Development (OGEES Institute), Afe Babalola University, Prof. Damilola Olawuyi, said directing scarce resources to frontier basin exploration without any clear data and information that would drive investor interest in those basins has been a questionable experiment.
Olawuyi, a Senior Advocate of Nigeria and Deputy Vice Chancellor of the university said: “Also, we must question how the Nigerian regulators aim to convince investors on such new explorations in this era of global energy transition, associated divestments, oil price volatility, reduced funding for new oil and gas discoveries, and prevailing production quotas and limits for existing and new production activities.”
He said rather than embarking on such costly experiments, NNPC should take a more realistic route that other oil companies worldwide are taking by restructuring to become fully integrated energy companies that would become superpowers in renewable energy and lower carbon energy projects.
The Director of the Centre for Democracy and Development, Garba Dauda, insisted that the momentum on the frontier in land exploration is dead.
He maintained that the frontier exploration is worth the investment adding that there has been a security challenge on the project.
Spokesman of NNPC, Olufemi Soneye, had noted that oil search in the north remained on course, insisting that NNPC Ltd, in compliance with PIA, is leaving no stone unturned to continue oil drilling projects in the North after decades of exploration in the South.
