28 July 2016, Sweetcrude, Abuja – Given the charge by President Muhammadu Buhari to the Nigerian National Petroleum Corporation (NNPC) this week to intensify efforts to find oil in the Lake Chad Basin, the National President, Certified Institute of Geographers (CIG), Mallam Adamu Sambo has stated that challenges posed by transportation, geographic location and wide currency exchange gap have hindered crude oil exploitation in the northern part of Nigeria
Sambo, in an interview with a local media, remarked that oil companies were not keen to go as far as the Lake Chad Basin to explore crude oil when they can conveniently do same on the high sea and transport them easily to overseas buyers.
According to him, “The issue of oil and gas exploration in the northeast has actually been there for a very long time. From geological studies, there is oil there and there is gas, but whenever it comes to the exploitation of the resources, the oil companies don’t want to go there. They ask the simple questions: Why should I go there? When I get the crude oil, what will I do with it? Export it or refine it? If I refine it, I will be getting local naira.
“The companies are coming to invest dollars and they will be getting local naira – they are not interested. They want to invest dollars and they want to get dollars back. So, why should I go to north-east to drill oil almost 2,000km (away) when I can drill the oil in the high sea and load the tankers in the high sea? That’s just the basic economics that prevented the exploitation of oil in the northeast.”
He noted that countries like Chad have no choice but to endure the rigour of exploring crude oil in the Lake Chad Basin where it is located, given the country’s economic condition.
“They have been drilling oil in the Republic of Chad for more than 10 years. They had to construct a 200,000 kilometres export pipeline. They are not refining in Chad; they are exporting it from Chad across the whole length of the Republic of Cameroon to the sea, to export their oil, because they do not have more natural resources around, or they do not have the capacity to tap the other natural resources.
“That one is the easiest one (from which) they would get forex, so they need it; they are still taking crude oil from that axis, but they have to pump it 200,000 kilometres from the pumps to export. And the proceeds they have garnered have actually changed the Republic of Chad for the better.”
Sambo, however, gave a glimmer of hope with the way another one of Nigeria’s oil-rich but landlocked neighbours to the north, Niger Republic, has found a way out of the problem.
“Our immediate neighbours, Niger, has a large expanse of land, but few people. Niger has about 16 million people in the population, almost like Lagos State. But Niger is larger than Nigeria by land size. They have crude oil there, but they cannot approach Nigeria to export because Nigeria is not even exploiting the crude oil possibility in the northeast. So, they just opted for modular refineries. The Chinese went there, they drill oil and they are refining the oil there,” he said.
He, therefore, advocated the use of modular refineries in Nigeria because they can be built within a short time and can adequately take care of the country’s local consumption demand.
“Modular refineries are the kind of refineries for small-scale compact refineries which, I think, Nigeria should start using, because it’s very easy to build such refineries; it will take you just about a year to build this kind of refineries. Those ones can easily take care of our needs.”
He suggested that the government regulates those refining petrol illegally and provide technical support and funding instead of hounding them and destroying their facilities.
“Instead of Civil Defence officers chasing these boys who are establishing illegal refineries, they should bring them together and help them to access fund from this Nigerian Petroleum Development Fund (PTDF) and organise the building these modular refineries, small scale refineries.
“Those small scale refineries can take care of our local consumption, a lot of people will be employed and a lot of businesses will wake up as a result of that. The psyche of the government is very unfortunate.
“The government is supposed to call these people (together), get the Nigerian National Petroleum Corporation (NNPC) engineers because, I can tell you, the immediate past and present Nigerian engineers working with NNPC, they can design those modular refineries and build them.”
“Those building these illegal refineries were ex-workers of these oil companies. They know how it works, they have the knowledge, they have the technical capacity, but they are not being encouraged. In fact, they are being turned into criminals because what they are doing has not been approved by the government,” Sambo said.