Buhari’s Chad Basin wild goose chase

Maj.-Gen. Muhammadu Buhari (retd.)

THE plan by President-elect, Muhammadu Buhari, to commit resources to a renewed search for crude oil in the Chad Basin is a terribly bad idea and should be dropped. At a time of dramatic changes in the global oil and gas sector, featuring oversupply, falling prices and the emergence of many more producers, it is retrogressive to consider resuming the 40-year-old waste of public funds in a venture of uncertain benefits. Instead, Buhari should prepare a reconstruction plan for the North-East zone that would harness its untapped agricultural and solid minerals potential.

Buhari is reaching back into a time long gone and thinking of solutions that have no place in today’s globalised era. Receiving a delegation of notables from Borno State in Kaduna, he promised that his administration would reactivate the fast-receding Lake Chad and deploy “enormous resources to resume a vigorous search” for oil in the Chad Basin. We fully back his plan to replenish the vanishing Lake Chad to boost farming, irrigation and fishing which, back in 2001, provided food and income for over 10 million people in the basin area reaching seven countries, according to the United Nations Economic Commission for Africa.

But it is politics and not economics that has been driving the search for crude in the Chad Basin area. Begun in 1978 when Buhari was the Federal Commissioner (minister) for Petroleum, successive governments have committed funds, through the Nigerian National Petroleum Corporation, to prospecting for oil in the area with only little results. Buhari, especially, appears to have taken it up as a personal crusade as he resumed the search when he rode to power as head of state in 1984 on the back of a coup. It would be short-sighted and out of tune with today’s reality if he once more sees economic salvation in Chad Basin oil.

When he left office as military head of state in 1985, crude oil politics and revenues were of more paramount global importance. Today, the capacity of the Organisation of Petroleum Exporting Countries to solely determine crude prices has been smashed with the emergence of many more producers, reduced dependence of the United States and the West on OPEC member countries following America’s resurgence as a major producer, fuelled by its robust shale oil output and increased use of alternative energy sources. The International Energy Agency’s authoritative Oil Market Report on April 15 said global supply rose to 95.2 million barrels per day in March while demand was 93.6mpd. In 1985, the US bought over 40 per cent of Nigerian crude, but this declined progressively until it reached zero last year. Not only had the US become the world’s third largest producer by this year with 9mpd, after Russia (10.59mpd) and Saudi Arabia (9.69mpd), new entrants like Angola, Ghana, Ivory Coast, and a clutch of former Soviet republics in the Caucasus have since gained importance as producers and exporters with the IEA listing 115 countries as producers by March 2015.

The prospect of finding oil in the Chad Basin was brightened by oil finds in Niger Republic and Chad. In 2012, the then NNPC Group Managing Director, Andrew Yakubu, said an integrated team put together by a consortium of consultants set up by the Federal Government to study the possibility of exploring oil (in Lake Chad Basin) had identified an area of 3,350 square metres indicating the presence of oil. Before then, the NNPC had claimed that there was a possibility that oil could be found in commercial quantity in the Chad Basin because of the discoveries of commercial hydrocarbon deposits in neighbouring countries of Chad, Niger and Sudan, which have similar structural settings with the Chad Basin. Other areas of interest in the oil hunt include the Anambra, Bida, Gongola/Yola and the Sokoto basins alongside the Middle/Lower Benue Trough.

But how did Chad go about its oil search? A “Convention Agreement” signed in 1988 granted a consortium of petroleum companies a long term concession of 30 years to develop the oilfields in the Doba Basin, in southern Chad and to produce and transport oil to the market. Under the 1988 convention, the consortium was granted an initial exploration permit to 2004. By 1993, oil resources had been confirmed in the Doba Basin, within the original exploration territory designated in the 1988 convention agreement. The consortium, according to United Hydroncarbon, an international oil corporation, consists of ExxonMobil (the operator of the project), Petronas, Chevron and Esso Exploration and Production.

This is the way to go. Buhari should leave the private sector, which will be guided by profitability, to prospect for oil in the Chad Basin or anywhere else in Nigeria. We recommend that the state-owned oil prospecting firm be immediately privatised to avoid the kind of political influence that motivates the desperate quest by some elite faction to find oil, using common resources when proven oil finds in Anambra, Imo and Abia and others are kept in reserve.

Buhari should rather key in to the Borno Agricultural Transformation Plan under which Governor Ibrahim Shettima plans to plough in N30 billion “for economic rebirth and rehabilitation” of the insurgency-devastated state and create thousands of jobs. Oil resources have done more damage than good to Chadians. A report says the exploitation of oil has destroyed the local farmers’ production system, depriving them of their livelihood; it is polluting the water, soil and air; it is dividing the people and sowing despair. The stark reality is that since the first oil boom of 1973, our per capita income of $2,700, despite our enormous oil earnings, ranks far below Singapore’s $36,897.87 and Botswana’s $7,704, which have much less resources.

A well-thought-out programme on agriculture that provides 80 per cent employment, and exploitation of its proven mineral deposits – gypsum, feldspar, topaz, potash, iron ore, kaolin among others – to create processing industries, will cost far less, create mass employment and be less ecologically disruptive, is more desirable. Accompanied by an efficient programme of land reclamation from desertification and the reclamation of Lake Chad, should be the programme; not wasting taxpayers’ funds on a sectional venture of scanty prospect and dubious benefit to country.