The continued search for oil in the North

The outgoing Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru, last week reiterated the plan of the corporation to resume crude oil search in the Chad Basin if it could secure clearance from the security agencies.

The decision not to let go of the search, Baru said, was hinged on the high prospects of finding crude oil in the Chad Basin. The NNPC top brass, who noted that the search for oil in the basin was suspended after a team of the Frontier Exploration Services and their consultants from the University of Maiduguri were attacked and abducted in 2017, said Niger Republic drilled over 600 wells before striking oil, while Nigeria had only drilled 23 wells, adding that with perseverance, Nigeria could also get considerable oil from the area.

That the NNPC is committing huge resources to the search of oil at a time when the world is seeking an alternative to crude oil is not only sickening but alarmingly exasperating. While every available indicator suggests that the end of crude oil reign is in sight, Nigeria has continued to act as if oil will forever be gold. However, the stark reality, irrespective of Nigeria’s obsession with crude oil, is that the world is leaving crude oil behind in search of cleaner energy sources. So, crude oil will no longer attract as much revenue as Nigeria is used to.

Already, both Britain and France have announced their plan to ban all petrol and diesel vehicles by 2040. India and China, two of the biggest importers of Nigeria’s crude oil, have also announced dates when fossil-powered automobiles will no longer be allowed in their territories.  Tesla Inc. is investing a huge fortune on the mass production of electric vehicles. Volvo has resolved to stop the manufacture of both diesel and petrol vehicles by the end of this year, and many automobile companies are joining the fray. Battery-powered cars, buses, trucks, forklifts, rail cars, etc are coming on stream daily. Solar-powered vehicles are also becoming commonplace. The more these become the vogue, the less need there will be for crude oil. It is not that crude oil will become totally useless, but the reality is that its usefulness will decline so seriously that no wise country will hinge its survival and sustenance on it. So, it will not matter even if every state in Nigeria flows with crude oil because it will no longer attract the sort of returns that will keep us afloat as a nation. Knowing this, why does the government expend energy and scarce resources on a venture that is doomed to yield less than satisfactory benefit? Why are we so engrossed with the past that we lose sight of emerging opportunities around us?

The Federal Government and its agencies need to wake up to the reality that the era of crude oil is racing to its end. This is not because the oil wells are running dry but because the human nature is never content with having the same thing all the time. The truth is that new technology will always replace old ones just as new findings will always take the shine off older ones. So, cleaner energy is set to rubbish the glory of crude oil.

However, in spite of these well known facts, Nigeria has been sinking fortunes in search of crude oil in the North. Over the last 30 years, a total of $340million and N27billion has been deployed to crude oil exploration in the North East. The government is increasing this with the adventure in the Sokoto Basin and Benue Trough. There is also the likelihood of the NNPC embarking on crude oil search in the Gongola Basin. If a fortune has already been sunk in search of a fleeting fortune, what is the wisdom in staking more fortune to secure an unsure fortune? According to a study carried out in the North East, there is an unproven reserve of about 2.3 billion barrels of oil reserves and about 14.65 trillion standard cubic feet of natural gas available for a minimum of four countries in the Chad Basin area. Recent studies even suggest that the combination of both the Sokoto Basin and Benue Trough have less crude oil and natural gas than the Chad Basin, whereas there are about 37 billion barrels of proven oil reserves and about 187 trillion standard cubic feet of gas in the Niger Delta region. So, while there is the likelihood of oil and gas being available in the northern part of the country, the quantity does not give much cause for cheer.

So, it is high time that those who romanticise crude oil and the pecuniary returns from it sprang out of their self-inflicted myopia and realized that the days of crude oil as a means of economic power are numbered. Crude oil will never sell at $100 per barrel again. In less than 10 years, the cost of extracting and refining crude oil will likely be higher than its market value. So, the faster we move on to something else as a country, the better for us.