Nigeria Starts Production at New Oil and Gas Field

Nigeria’s state-owned oil company NNPC started drilling for oil and gas at a field in the country’s north, marking the first time the African nation starts producing at a site outside the Niger Delta. NNPC said in statement that phase one of the Kolmani project would have an oil refinery, gas processing facility, 300 MW power plant and a fertilizer plant producing 2,500 tons per day. The field is estimated to have reserves of 1 billion barrels of oil.

NNPC first announced in 2019 that crude oil, gas and condensate was discovered at the Kolmani region in Northeastern Nigeria, a region that has been battling with Islamist insurgency.

Nigerian President Buhari said Kolmani had 1 billion barrels of oil reserves and 500 billion cubic feet of gas.

No oil major is involved in the project being developed by NNPC, local firm Sterling Global Oil and New Nigeria Development Commission, a conglomerate owned by 19 northern states.

“It is therefore to the credit of this administration that at a time when there is near zero appetite for investment in fossil energy, coupled with the location challenges, we are able attract investment of over $3 billion to this project,” Buhari said at a ceremony to start the oil project.

Nigeria has been searching for oil in the largely poor north of the country, the heartland of Islamist insurgency.

Buhari warned the NNPC and its partners to work with local communities to prevent attacks to infrastructure. Militants in the past have blown up pipelines in the Niger Delta.

Oil majors in Nigeria are divesting from onshore to focus on offshore drilling due to increasing insecurity and oil theft, which have led to a decline in production and caused Nigeria to lose its status as Africa’s top oil producer.