The Minister of State for Petroleum Resources, Timipre Sylva, has said that get funding for the Kolmani Oil Field won’t be easy as global financiers are gradually turning their back on fossil fuel funding.
Sylva, said this at the ground-breaking ceremony of the Kolmani Oil Prospecting Licenses (OPLs) 809 and 810, Tuesday in Bauchi.
According to him, funding for the project will only be available when decarbonisation is incorporated into its plan.
The Minister’s comments comes on the back of commitments by countries pledging to hasten the move away from use of dirty fuel.
Even oil majors have towed this direction as they are gradually moving away towards investments in renewables, away from fossil fuels.
Despite these seeming challenges, Sylva said the opportunity for investment and fantastic returns remains undiminished and is continually available to any discerning investor.
Today’s event is coming on the heels of the recently concluded Conference of Parties (COP27) in Egypt which was the epicentre for discussing the energy transition and climate change. We all recall the commitment that Mr. President made during COP26 in Scotland that Nigeria will attain net-zero carbon emissions by 2060. That commitment has profound implications on the manner in which our natural resources will be exploited, and is responsible for measures which have already been taken to ensure the crystallization of that commitment.
“Given the fact that most players within the international financial ecosystem are progressively moving away from funding fossil fuel development, financing for demand, supply and infrastructure projects will need to incorporate decarbonisation into project plans in order to attract funding,”
An excited Sylva stressed that the ground-breaking ceremony of the Kolmani Oil Field is a testimony that “the hydrocarbons sector still holds promise of returns on investment, highlighting the role that this resource will continue to play in the global energy mix.
“This is why I am particularly excited at the partnership between NNPC Limited, Sterling Global Oil, and New Nigeria Development Commission (NNDC) to carry out this drilling campaign,” he said.
The former Bayelsa Governor said that with energy poverty, lack of access to clean cooking fuel, and insecurity steering the country in the face, the federal government is left with no choice than to harness it natural resources-hydrocarbon.
According to Sylva, the government will continue to ensure it focus on bring the benefit of the country’s hydrocarbon resource to Nigerians.
“The risks arising from our current challenges of energy poverty, lack of access to clean cooking fuel, insecurity and unemployment are pervasive across the country, but so is the value proposition to all stakeholders. The reward of getting it right is so huge that we have no option but to stay the course and see it through. This is why I welcome the collaboration between NNPC Limited and its partners in this campaign, and look forward to the expansion of these partnerships with respect to other basins which will give us a fighting chance to address the myriad of issues that confront us.
“Today marks yet another significant milestone in our collective quest as a nation to ensure energy security and access for our people. From North to South, East to West, our country is replete with rich hydrocarbon resources which the administration of President Muhammadu Buhari and Minister of Petroleum Resources is committed to finding and developing to end energy poverty, create shared prosperity and enthrone sustainable development.
“In 2019 when the NNPC announced that it had encountered oil in ‘commercial quantities’ at the Kolmani River Well II, the nation celebrated the news as a fitting outcome for years of geological investigations which were carried on with the tenacity and consistency that embody the pioneering spirit of the organisation. Despite the enormity of challenges that NNPC was confronted with, the day has come when we can collectively witness and celebrate drilling for hydrocarbons in the North of our dear country.
“At the heart of this administration is the vision to drive infrastructure and industrial development of the country in order to prosper her citizens and make life more meaningful to all. This is the motivation that sustained the quest to reform the petroleum sector, which culminated in the passage and signing into Law by Mr. President of the landmark Petroleum Industry Act in 2021.
“One of the key mandates of the Ministry of Petroleum Resources is to grow reserves from the current 37B barrels of oil to 40B barrels of oil by 2025. The PIA 2021 provided the regulatory support and framework for achieving this mandate by providing for the Frontier Exploration Fund which the NNPC can utilise to deploy world class cutting-edge technologies to de-risk exploration in the frontier basins. The commencement of drilling of Kolmani fields which could hold as much as one billion barrels crude oil reserve, will significantly contribute in boosting our oil reserves and ensuring our continuous energy sufficiency,” he explained.
He assured that the present administration is committed to the uninhibited development of the petroleum industry, and leaving it better and more prosperous than it met it.
He said: “Indeed, it will go down in the annals of history, that it was during his tenure both as President and Minister of Petroleum Resources that the hydrocarbons map of Nigeria was redrawn to include a region which was once the subject of speculative optimism, crystallising instead into definitive prospectivity.”