This write up was prompted as a comment to a post from one of my Facebook friends this morning to the effect that Cross River State is not an oil producing state.
Of a truth, Cross River State is not an oil producing state but that doesn’t mean that the state is not an oil bearing state. Cross River has oil/gas, as a matter of fact, our oil/gas reserve is relatively impressive.
Our only problem unfortunately, is that over 75% of our oil/gas reserve, is STRICTLY under the control of Shell Petroleum Development Company (SPDC).
How? – In the late 1950s/1960s SPDC acquired the mining licences to mine the hydrocarbon (crude oil/gas) around Akpabuyo and the environs of Cross River State, while Mobil obtained a similar licence for the Eket axis of today Akwa Ibom State.
SPDC conducted seismic and exploration activities which revealed presence of hydrocarbon finds, unfortunately however, the economics, CAPEX (Capital Production Expenditure) involved in producing this find was considered not ‘economically viable’ as at that time, since it would have possibly involved SPDC laying hundreds of kilometers of pipelines to tie into their already existing and robust production in Rivers/Bayelsa/Delta State or in the alternative build a stand-alone production terminal in the state, the cost implication of either would have been astronomical.
To appreciate their financial reasoning, this was a period when the cost of producing one barrel of crude oil was provocatively huge due to the technology at that time.
So, long and short of the story is that, SPDC opted to ‘cap’ (in layman terms keep-in-view) the drilled wells in our state for possible future consideration and that is the reason why we are said to be a non-oil producing state.
Of course as can be imagined, the Department of Petroleum Resources (DPR) which is saddled with the responsibility of listing available oil wells for oil block bidding cannot list the wells in Cross River State because they belong to SPDC.
I raised this observation a few times while I was working in the oil and gas sector and even offered to help to do something about it because I always feel pained whenever I hear people refer to Cross River State as a none oil producing state, when indeed we are richly blessed with hydrocarbon.
There is still hope for Cross River State to assume her pride of place as an oil producing state if the right approach is employed side by side the visionary intentions of His Excellency, Senator Ben Ayade.
This, added to the fact that HE has also indicated his desire to attract oil and gas investors into the state gives us plenty reasons for hope for a better and prosperous Cross River State.
Maurice Ekong writes from Calabar
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