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Nigeria unveils untapped oil reserve as nation loses billions to thieves

Nigerian President Muhammadu Buhari on Tuesday announced the discovery of a huge oil reserve in the north of the country that could hold more than a billion barrels of crude.

Buhari was on hand in a border area between Gombe and Bauchi state in the northeast of the country to inaugurate a long-term drilling and refining project which he expressed hope could improve the country’s economy. The discovery and subsequent development of resources in the area is the first of its kind in northern Nigeria.

Nigeria is an OPEC member and was once Africa’s biggest oil producer, but its industry has suffered badly under old Buhari, who is expected to step down in February. Buhari’s mishandling of terrorist threats such as the jihadist organization Boko Haram, the itinerant Fulani “bandits” who have devastated Christian communities and stolen countless billions in natural resources, and other criminal organizations have left the country little interested in supporting the 79-year-old’s administration or his party, the All Progressives Congress (APC).

Nigeria has largely failed to capitalize on its prodigious natural resources, especially oil, due to the neglect of the refining facilities it has and the failure to invest significantly in the construction of other . The country has also faced a wave of widespread oil thefts in which unspecified “bandits” built illegal pipelines into government pipelines and stole the oil from them, resulting in billions of dollars in losses for the government. .

In his Monday announcement, Buhari said the Kolmani area in which the oil was found would contain more than a billion barrels and an additional 500 billion cubic feet of natural gas.

“It is indeed significant given that efforts to find commercial oil and gas outside the established Niger Delta Basin have been attempted for many years without the expected results,” Nigeria said. Prime time The newspaper quoted Buhari as saying.

“As a fully integrated in-situ development project comprising upstream production, oil refining, power generation and fertilizers, the project promises many benefits for the nation,” he pledged. “This includes, but is not limited to, energy security, financial security, food security as well as the overall socio-economic development of the country.”

Buhari also praised himself and his administration for attracting significant foreign investment, which he estimated at around $3 billion, into an oil and gas project “at a time when there is no almost no appetite for fossil fuel investment”.

from Nigeria Daily Trustwho on Monday announced Buhari’s planned visit to the Kolmani region, predicted that if the government manages to extract the oil in question and prevent it from being stolen, it could generate up to 32 trillion naira, or about $72 billion. .

Members of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASAN), during a protest against crude oil theft. (Photo by Olukayode Jaiyeola/NurPhoto via Getty Images)

“With an estimated crude oil reserve of 1 billion barrels from new oil wells in the north, Nigeria is expected to earn nearly $73 billion or 32.3 trillion naira at an average world crude oil price of $73. the benchmark barrel used for the 2023 budget proposal,” Daily Trust predicted. “This gain could be realized over a period of 10 years; depending on the start of commercial production.

That newspaper’s report offered more details on the scope of the project, including plans to build a refinery in the area rather than just extracting and selling the raw product. NNPC Limited, Nigeria’s main oil company, would manage the construction of a refinery and “build a power plant which will use energy from wells to generate electricity”.

Determining how to secure the oil so that criminals do not steal it from storage tanks and pipelines will be critical to the success of the project. In southern Nigeria, where all of the country’s oil wealth was once located, organized crime syndicates have nearly perfected the construction of clandestine infrastructure to steal government oil. Last month, the NNPC revealed that it had uncovered an elaborate 2.5-mile-long secret pipeline embedded in a key export terminal. The secret pipeline is said to have operated for at least nine years, siphoning off oil and costing NNPC around 600,000 barrels of oil a day.

In a separate theft operation, an NNPC official revealed in September that criminals tapped 295 illegal taps in one of the company’s pipelines, resulting in the theft of 95% of a terminal’s oil.

A Nigerian Senate committee study released on Wednesday found that Nigeria lost $2 billion in stolen oil between January and August 2022. Nigerian news outlet Punch noted, however, that the report “did not name a single person or commercial entity performing the theft”. oil theft.

The Senate’s estimate is much more modest than a similar attempt to quantify theft by the Prime time which revealed in September that Nigeria lost $10 billion to oil theft between January and July.

The thefts caused Nigeria to lose its status as Africa’s top crude oil producer in May to Angola.

Oil thieves have also set up networks of illegal oil ‘refineries’ across Nigeria, creating huge security risks. In April, an explosion at an illegal “refinery” in southern Nigeria killed 110 people. The blast was so large it incinerated a nearby forest and several cars lined up to buy illegal fuel.

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