By Nse Anthony-Uko
ABUJA, (Sundiata Post) – The federal government on Tuesday justified the continuing search for oil in the Northern part of the country despite failures recorded in the past.
The Minister of State, Petroleum Resources, Dr. Ibe Kachikwu, who offered perspectives on government’s oil exploration drive in the North, said Tuesday that many fundamental factors informed the decision to continue prospecting for oil in the region.
Responding to questions at the public presentation of the 2018 budget proposal in Abuja, Kachikwu stated that the government has a real obligation to explore for oil anywhere there is reason to do so, noting that one of the reasons for the exploration activities in the North was the fact that it had been established that oil lies underneath the Lake Chad Basin.
He stated that the fact that the price of oil has fallen was not enough reason to stop exploration activities, adding that the commodity is still the country’s dominant foreign exchange earner.
Kachikwu, who stated that a huge responsibility still lies with oil, noted that the drop in oil prices and increasing world attention towards other energy sources would not stop hamstrung exploration activities.
He said: “Massive exploration activities will continue to proceed obviously in oil producing areas. The contribution of oil in the 2018 budgetary expenditure expectation is almost 60 per cent, that is, if you take the 37 per cent in debt. A huge amount of responsibility lies with oil.”
He, however, pointed out that his personal philosophy in the exploration of oil was that the Nigerian National Petroleum Corporation (NNPC) should not drive the process.
“My philosophy is that it shouldn’t just be NNPC that should prospect for oil in the North-east. What we are trying to do is to begin an inland basin programme and then we put in enough processes and incentives to bring the private sector to look for oil at their own cost under Production Sharing Contracts (PSCs) and that will therefore not place a burden on the federal government but at least open up the frontiers which will be for the good of the country,” he said.
Several analysts have continued to question the justification for the over $3 billion reportedly sunk into oil exploration in the North by the current administration, in spite of its clamour for economic diversification as well as the global reality of the diminishing significance of the commodity in a couple of years.