How oil exploration in north east cost NNPC $6.5bn deficit income

How oil exploration in north east cost NNPC $6.5bn deficit income

More than the $6.5 billion, representing about 70 per cent expected income generation by the Nigerian National Petroleum Corporation (NNPC), between 2015 and 2016 has been spent on oil exploration missions in various locations in the north east part of Nigeria, according to findings by Ripples Nigeria.

The need to find alternative oil producing areas, in the wake of incessant hostilities by militants in the Niger Delta region is the major reason for renewed efforts by the corporation to revisit some of the oil spots in the Chad Basin, bordering Borno State, including new sites located in former Gongola State, otherwise code named “inland basins.”

To this effect, it was gathered that a policy thrust targeted at getting crude oil from the various locations at all cost saw NNPC spending more than three quarters of its earnings in achieving the aim.

The unaudited accounts of the corporation, sighted by Ripples Nigeria, indicates that out of an estimated $9.2 billion gross income, $6.5 billion was earmarked for explorations, while the rest went into other obligations and sundry payment, including over head costs.

It was also learnt that most of the expenditures were incurred in 2016 when the militancy crisis took a wider dimension.

Read also: NNPC, oil marketers dig battle trenches over fuel import

Thus, between September and November 2016, a total expenditure on the mission increased by $1.87 billion when compared with $1.2 billion in the same period a year before.

The assertion was further supported by the NNPC Monthly Financial and Operations Report released on Monday, which indicated that: “A marginal increase in the trading deficit was due to an upsurge in IDSL Operating costs attributed to the ongoing mobilization activities in both Benue Trough seismic data project located in Bauchi and Party 05 in Elele, Rivers State, despite an improved revenue generation.”

But a geologist with Summy Marine Company, Smith Jones, said there was nothing beneficial to Nigeria for exploration of crude in the north east or any other region that could be better than consolidating the vast oil in the Niger Delta, given the opportunity cost in the country’s favourable.

”It is amazing to hear that the efforts of the past decades, which yielded no result is being revived. Even Chad, which has more of the River basin in the sub-region is currently not finding it cost effective exploring the crude in the area.

“Nigeria has no business wasting its resources in the same region unless there is a political undertone for that.

“Petrobrass, a firm that was initially involved in the exploration of the crude in the northern part of the Nigeria has since indicated that it is an effort in futility, and that is what it will be”, he asserted.

However, the Group Managing Director of NNPC, Dr. Maikanti Baru, addressing stakeholders, who visited him recently, said the corporation’s dream is to have as many crud oil site as possible tested for their commercial values.

This, analysts say, is the plank upon which the resources of the establishment is being frittered away.

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