Wasting asset – The Nation

  • It is not acceptable that 211 oil blocks are idle and no bid round in 10 years

It is no news that Nigeria is one of the better endowed countries; it is even trite that she thrives in mining her abundant stock of crude oil in the past 50 years. But what may be new and indeed shocking to many is that over these years, she has not been able to tap nary half of this commodity. But more troubling is that in the last 10 years, not one mining lease has been handed out to investors and prospects seeking to chart new frontiers in the much lucrative black gold enterprise.

This must be a revelation to Nigerians, especially in the face of crippling poverty and much deprivation faced by the citizenry. Not breaking new grounds has meant that oil production rate has stagnated for over a decade to an average of two million barrels per day. It must be the same for gas production. This also has serious deleterious effect on the gross revenues accruing to the country’s coffers. Considering that Nigeria earns the bulk of her revenues from oil proceeds, it could be said that the country’s economy has been operating at 50 per cent capacity.

According to a report sourced from the Department of Petroleum Resources (DPR), of the 390 stock of oil blocks in Nigeria, only 180 are allotted while 211 are lying fallow. The last oil block licensing round was carried out by the Federal Government in 2008.  Currently, there are 111 Oil Mining Leases (OML) and 68 Oil Prospecting Licenses (OPL) and there are seven basins viz: Niger Delta, Anambra, Benin, Benue, Bida, Chad and Sokoto.

Of these basins, the most active of course is the Niger Delta which has a total of 187 blocks, with 34 thereof still idle and unallocated. While most of the other basins have some activities, no matter how marginal and skeletal, the Sokoto basin with 28 blocks remains wholly unallocated.

This explains why there has been no major giant stride in Nigeria’s oil industry for quite some time while other oil producing countries are developing aggressively, carrying out bidding rounds annually. The need to mine and process hydrocarbon deposits has become more urgent in the face of new developments beginning to overtake the use of fossil fuel.

Apart from the fact that, shale oil has been developed to commercial quantity in the United States, the world is rapidly migrating away from the use of fossil fuels for power requirements. Gas has been in ascendance; alternative and renewable energies like biogas, sun and wind, to name a few, are the future of energy and are being preferred. But more threatening to crude oil would be electric vehicle (EV). This is back with urgent pre-eminence in the world’s quest for clean and environment friendly energy. It is reported that about 25 per cent of automobiles in the world today are running on electric.

This portends a dour augury for fossil fuel and those who currently live by it. Its days are short. This is why we are worried that the Nigerian National Petroleum Corporation, NNPC sits coolly on huge deposits of crude oil in Nigeria. We expect that the NNPC would have taken a strategic view of the situation and accelerated the mining of Nigeria’s crude while oil still has some value. It is particularly worrisome that in the last couple of years, NNPC has intensified direct mining activities in northern basins which have little prospects and at huge cost, instead of concentrating efforts in the oil-rich Niger Delta.

Speaking at an oil summit, the Minister of State for Petroleum, Dr. Ibe Kachikwu, was quoted to have said, “We should be producing four million barrels per day of crude oil. We should be producing enough gas for power generation… something is fundamentally wrong with what we are doing… Oil is going to become a fast-degenerating asset. The shale phenomenon and alternative energy are taking over the world.”

If the minister understands so much, why is he not doing something about the situation?

Leave a Reply

Your email address will not be published. Required fields are marked *

*

x

Check Also

A scary state of the nation! – Guardian

Against the background of widespread uncertainty and eminent opinion leaders decrying the state of affairs ...