Thread by @beegeaglesblog

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 Let us wait until the size of the reservoir is known. It all depends on the size of the find. Assuming a 10,000bpd field which would require an 800-1,000km pipeline to export oil, best bet would be to site a small refinery there rather than trying to export

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 That is precisely why Niger sited a refinery (20,000bpd or so) near the oil find at Maradi cos trying to export from that oil field by a 1,500km pipeline would not have been commercially viable. Tis all down to the size of the find

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 So I'll advise that you wait and see. Commercial viability is two-pronged - if small, it could necessitate siting a refinery there to use the resource. If large, say 150,000bpd, investors could be tempted to invest in a hugely capital-intensive export venture from so far inland

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 This detail is important because whereas a pipeline that is hundreds of miles long can easily be sabotaged, a standalone refinery on the site could more easily be defended by security forces. Too early to tell anything at this point

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 This was what happened in Niger where a commercially viable find with a rather small flow rate meant that it could not be exported from the landlocked nation which would entail huge costs. The resource is refined for the local market

reuters.com/article/ozabs-…

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 Because the reserves at the Agadem oilfield exceed 450m barrels, it is possible that the lead prospector, China's CNPC might ultimately take the plunge, build a pipeline and evacuate the product to China to service local demand there

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 I suspect that Western IOCs are not jumping on the train cos except where there is a guaranteed + very long-term buyer, the returns on investment would not justify the investment

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 In simple terms, the assurance of prompt returns on investment is why IOCs are yearly announcing stupendous finds offshore Nigeria where the NNPC appear to be the only ones who are keen on oil exploration upcountry

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 There are tiny 6,000bpd oil wells in the Niger Delta but proximity to export zones is why investors are up for it. Even a 30,000bpd well in Kukawa would require a 1,000 mile-long pipeline to evacuate. At Kolmani River, that cannot be less than 600+ miles

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 Either of those would cost billions of dollars to set up for export operations. Reason why the IOCs have been rather uninterested in upcountry exploration that far inland

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 For now, the two most important details are unknown - the size of the reservoir at Kolmani River and the projected flow rate. Those details are KEY to investors' calculations on the potential viability of the oilfield and speed of returns on investment.

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 IF it is not a large enough find, a refinery could be sited there to meet regional+national demand. If that be the case, it might be easily defensible and not be as vulnerable to insurgent attacks as feared.

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 You may have noticed that BH never hit the Kaduna refinery whilst that city was on the boil, pre-2014. Where however export pipelines are involved, those are much more vulnerable to attacks. We saw this in Iraq and in the Niger Delta at H-Hour

@ReXkPiT @BashirAhmaad @NNPCgroup @The_Seeker76 So until the aforementioned all-important details are known, any analysis of the attendant security implications would be prone to error