NNDC and NNPC sign Chad Basin contract

Aug 08, 2006 02:00 AM

Drilling for oil can begin in the Lake Chad basin after an agreement between the federal government and the Northern Nigeria Development Company (NNDC). A Production Sharing Contract (PSC), agreement to exploit four oil blocks in the Lake Chad Basin will be signed in Abuja.
NNDC Group Managing Director (GMD), Alhaji Aliyu Alkali, made this known, saying with the agreement, the NNDC has got the full authority to begin oil search in the Lake Chad Basin. But the NNPC has denied the allegation, saying that efforts for oil search were stopped due to "technical reasons", and in order to assess the data so far generated with regards to oil explorations in the Lake Chad area.

Oil prospecting in the Lake Chad, earlier embarked upon by the NNPC in the late 1970's, was stopped in the late 80's in circumstances seen widely as controversial, with some experts and politicians in the northern part of the country alleging political reasons for the stoppage.
President Obasanjo had since 2001 during a visit to Borno state, promised that the federal government will not abandon the quest for oil in the Lake Chad, especially in view of the fact that the neighbouring Republics of Chad and Niger were able to strike oil in commercial quantities in their own sectors of the Lake Chad Basin.

The NNDC GMD, Alhaji Alkali, however, added that the company may look for new technical partners for oil prospecting in the Lake Chad once the agreement is signed, observing that ENERGEM, an oil prospecting firm with whom the NNDC won the oil block bid earlier, is yet to make full commitment to the project.
Alhaji Alkali added that three oil companies, one of which already has a presence in Nigeria in the Niger Delta region, have shown interest to partner with the NNDC.

Asked whether people in the Nigerian sector of the Lake Chad Basin will start seeing oil prospecting equipment in their area soon once the agreement is signed, the NNDC GMD said that everything depends on whether the technical partners that the companywill get for the project are able to mobilize to site within the shortest possible time.
Alhaji Aliyu Alkali maintained that the signing of the PSC is what is significant at this stage, adding that other details would be worked out in the coming period in the direction to kick-start oil search in the Lake Chad Basin.

Source: Daily Trust
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