Unlocking The Hydrocarbon Potential Of Cross River State: Prospects And Strategies For Oil And Gas Development BY MAURICE O. EKONG

PREAMBLE

This paper is provoked by the sad discovery that a vast majority of Cross Riverians appear to have lost faith and or given up on the fact that, we are an oil-bearing state with all the potential to become an oil-producing state, if and when all the politics/issues holding us captive are addressed. Having said that, let me proceed by x-raying why I am confident in my belief in the Oil Producing State Status of Cross River State. 

My belief is anchored on very simple scientific and natural facts, which support the idea that Cross River State cannot be so hated by nature such that when all her immediate and distant surrounding neighbors like Akwa Ibom, Rivers, Anambra, Cameroon, Equatorial Guinea, etc. have hydrocarbon sands (which produces oil and gas), only Cross River State would be cast apart.

Here are some of the basic conditions that a state must meet to be an oil-producing state: 

1. Geological survey/potentials: The state must have a favorable geological makeup that indicates the presence of oil and gas deposits. There must be hydrocarbon potential in terms of geological formations and structures that are favorable for the accumulation of oil and gas reserves. The reserve may or may not be significant, however, it must be commercially viable to attract investors.  
2. Regulatory framework: A clear and effective regulatory framework is essential to govern oil and gas exploration and production activities, ensuring that they are carried out safely and in compliance with environmental and social standards.
3. Exploration activities: Oil companies must conduct exploration activities in the state to confirm the presence of oil and gas deposits.
4. Security: The state must be able to provide adequate security for oil and gas facilities and personnel to ensure uninterrupted production.
5. Stakeholder engagement: The state government must engage with local communities and stakeholders to ensure that their interests are represented and that they benefit from the oil and gas activities in the state.
6. Community engagement: Both the state and operators must engage with local communities and address their concerns to ensure that they benefit from the oil and gas resources extracted from their land.
7. Local content development: Developing a skilled local workforce and local supply chain is essential to ensure that the state benefits from the economic opportunities presented by the oil and gas sector.

Apart from the 2nd item on the list – Government Regulatory Framework, Cross River State meets all the basic parameters to be an oil-producing state. This fact would become apparent in the course of this paper. 

PRESENCE OF HYDROCARBON (OIL AND GAS) IN CROSS RIVER STATE

Cross River State is located within the Niger Delta Basin, which is known to be one of the most prolific hydrocarbon-producing basins in the world. Several studies have explored the geology and hydrocarbon potential of the state, as well as the challenges and opportunities for its development. 

The State has several oil and gas reserves, but most of them are said to be relatively small (based on 2D seismic surveys that were conducted in the 1950s/60s) compared to other oil-producing states in Nigeria. According to available records, the largest oil field in Cross River State is the Odukpani oil field, which was discovered in the 1960s. The field is located in the southern part of the state and is estimated to have reserves of about 33 million barrels of oil and 3.3 trillion cubic feet of gas.

Another significant oil and gas field in Cross River State is the Akpet Central Field. This field is located further to the northern part of the state and was discovered in 1986. The field is estimated to have reserves of about 27 million barrels of oil and 21 billion cubic feet of gas. There is also the Ogoja gas field, which is an onshore gas field located in the northeastern part of Cross River State. The field has estimated reserves of about 70 billion cubic feet of gas.

The above-mentioned reserves may come as a surprise to most people because the popular and well-known oil activities in the state were during the days of Moni Pulo Limited’s operations at Bakassi. Although Moni Pulo Limited (MPL) purportedly stopped operations in the state after the handing over of Bakassi to Cameroon and the subsequent determination that the state is not a littoral state in 2008, MPL maliciously sneaked back into the state and carried out some very successful seismic activities around the Northernmost flank of their OML 114 acreage. The seismic was conducted through a third-party service company known as Sinopec in 2011 to determine the presence of hydrocarbon within the state and again in 2013 through another third-party service company known as Epanoe Nig. Ltd. for soil test, to determine the best place to position its drilling operations. The post-seismic interpretation indicated impressive oil plays with commercial viability. As a matter of fact, Moni Pulo Limited deployed a rig preparatory for a full drilling campaign at onshore Ikang in 2017, but a combination of factors led to the abandonment of that program, which would have unequivocally returned Cross River State back to the league of oil-producing states in Nigeria.

Shale gas is a natural gas that is trapped within shale formations. The process of extracting shale gas is known as hydraulic fracturing, which involves injecting a mixture of water, sand, and chemicals into the shale rock at high pressure to create fractures and release the gas. 

Cross River State has significant shale gas potential, particularly in the Akpet Central axis of the state. Studies have shown that the shale formations in these areas are rich in organic matter, which is the source of shale gas.

One of the advantages of shale gas is that it can be produced domestically, thereby reducing reliance on imported gas. In addition, the development of shale gas can also create jobs and stimulate economic growth in the state.

REASONS FOR THE LACK OF OIL AND GAS ACTIVITIES IN CROSS RIVER STATE

There are several reasons why Cross River State has not been a major player in the oil and gas sector of Nigeria. Being located on the eastern side of the Niger Delta, far away from the major oil and gas production centers in the western Niger Delta is a major challenge, because it has made it difficult, more expensive, and challenging to transport the resources from the state for export. 

Furthermore, one of the alleged reasons is the size of the oil and gas reserves in the state. When compared to other oil-producing states in Nigeria, the reserves in Cross River State are said to be relatively small. This has made it less attractive for oil companies to seek to invest in exploration and production activities in the state.

Although the size of the oil and gas reserves in the state is adjudged to be small when compared to other states, I strongly believe that this is not the main reason why, there appears to be a deliberate and repressive policy by the government against oil and gas operations in the state. Unconfirmed findings based on my interviews and private discussions with some industry stakeholders point towards the direction of environmental concerns. The state is known for its rich biodiversity and pristine rainforest, and this has raised concerns among environmental activists about the potential impact of oil and gas exploration and production on the state’s environment. This may have led to opposition to oil and gas activities in the state and has discouraged investment in the state’s oil and gas sector.

I am strongly of the opinion that, in an attempt to abide by certain international conventions on environmental sustainability, there appear to be undocumented concerns about the possible environmental impact of oil and gas exploration and production in Cross River State. This concern bothers around the fact that the state is home to several important ecological reserves, including the Cross River National Park and the Oban Hills Wildlife Sanctuary, which are home to several endangered species. As such, in other to avoid oil and gas exploration and exploitation activities, the government decided not to break down Cross River State into parcels of oil blocks. It is not a widely known fact that Cross River State is the ONLY STATE within the rich oil and gas spread of the Niger Delta that has not been delaminated into oil blocks. It is profoundly disturbing that, even far-flung states outside the Niger Delta like Lagos, Ebonyi, and Benue, have been broken down into oil blocks except CROSS RIVER STATE.

To appreciate how far-reaching the non-delamination of Cross River State into oil blocks is, one simply needs to understand that, the ONLY way any prospecting oil and gas company can come into the state, is through the process of bidding for and winning, and an oil block, after which relevant permits to prospect or mine is granted. So, without a permit (either an Oil Prospecting License (OPL) or an Oil Mining Lease (OML), Cross River State stands a ZERO chance of getting into the league of the oil-producing states. 

PROSPECTS AND CHALLENGES OF ABANDONED AND CAPPED WELLS IN CRS

One of the issues facing the oil and gas sector in Cross River State is the presence of abandoned and capped wells. These wells were drilled in the past, mostly between the 1950 – 1960s by Shell Petroleum but were abandoned for various reasons, such as low productivity, technical difficulties, or in most cases, that the wells were not “commercially viable” to meet the then operating costs of the Exploration and Production (E & P) company(ies). I personally find it difficult to challenge the econometric reason for such companies to abandon such discoveries because, before an E & P company decides to proceed with drilling and ultimately an oil production campaign, there are major financial analyses that must be taken into consideration, to determine the viability of its Operating Expenses (OPEX).

Unfortunately, CRS is situated in the eastern part of the Niger Delta region, which was then far away from any major oil and gas production activities in the 1950s/60s. The implication of this locational disadvantage was that there were no existing close by infrastructures such as oil export terminals nor Floating Production Facilities (FPSOs), where the produced oil can be stored for processing and export. The closest oil terminal was the Mobil facility at Eket, in Akwa Ibom State, and given the competitive nature of the scramble for oil in those days, I doubt if Mobil would have been favorably disposed to allow other companies to tie in their products into their terminal, under a farm-in agreement or a government regulatory policy in place for such an arrangement.

So, undertaking any form of oil and gas activity in Cross River State was not a very attractive prospect, because of the humongous cost involved in either laying a pipeline to Escravos, in the case of Shell, or building a stand-alone Export Terminal. The available options couldn’t stand the slightest financial analysis, so these companies simply capped and abandoned even the wells, that had good prospects, with evidence of oil plays, because the OPEX prognoses didn’t consider them to be containing huge deposits of oil and gas to justify such investments as being commercially viable. 

Paradoxically, similar wells which were located close to areas with existing oil and gas infrastructures were later returned back to NNPC and sold to Nigerians under the Marginal Oil Field Development program, which was introduced to encourage indigenous participation in the oil industry and also to increase government’s take on undeveloped acreages. Note that this program was developed to discourage the continuous holding of undeveloped fields by International Oil Companies (IOCs). Note further that whereas it was easy to place such abandoned and undeveloped marginal fields which were in states with marked-out oil blocks, the same could not be applied to Cross River State because there are no oil blocks existing in the state, and the first step to any oil and gas activity in Nigeria, is to get an operating license from NNPC through the bidding for an oil block.

So, this made it possible for a company like Moni Pulo Limited and several others, to bid for and acquire an operating permit for OPL 230 between Abana (in then Cross River State) and Efiat- Mbo in Akwa Ibom State. Upon discovery of her first oil in 1990, MPL applied to DPR and was granted permission to go into discussions/agreements with Addax to lay a pipe and tie in their products into their FPSO (Knock Taggart) for processing of their crude for onward export.

There are several abandoned capped wells in Cross River State. Available data discloses that some of these abandoned wells are located in Bakassi, Akpabuyo, Calabar South, Biase, Akamkpa, Odukpani, etc. Some of the documented and notable examples from the “Nigerian Oil Concession Map” are Calabar 1,2,3 and 4 wells located at Odukpani and Ikang 1 well at Bakassi. There are certainly many others around the creeks of Odukpani, Bakassi, Akpabuyo and Biase, and Calabar South. I was also pleasantly surprised at the Akamkpa oil field, which was discovered in the 1980s. The field was operated by the Nigerian Agip Oil Company (NAOC), but it was abandoned in the early 1990s due to low productivity. Today, the field remains abandoned, and the wells are capped.

FRONTIER BASIN DEVELOPMENT

The Nigerian National Petroleum Corporation (NNPC) has been actively exploring for oil and gas in frontier basins across Nigeria, including the Chad Basin, Anambra Basin, and Benue Trough. In 2018, NNPC announced that it had begun exploratory activities in the Benue Trough, which covers several states in Nigeria, including Cross River State. The Benue Trough has been identified as having significant oil and gas potential, and NNPC’s exploration activities are aimed at discovering new reserves and expanding the country’s hydrocarbon reserves.

If NNPC’s exploration activities in the Benue Trough are successful, it could lead to the development of new oil and gas fields in the region, which could potentially benefit Cross River State. The NNPC has also identified several frontier basins in Nigeria that have significant potential for hydrocarbon exploration and production, including the Chad Basin, the Gongola Basin, the Anambra Basin, the Bida Basin, and the Sokoto Basin. The Corporation has signed agreements with international oil companies to explore and develop these frontier basins. There have equally been some exploratory activities in the state’s offshore basins, such as the Calabar Flank and the offshore part of the Anambra Basin. 

Perchance, the Federal Government of Nigeria does decide, through The Nigerian Upstream Regulatory Commission (NURC) to explore and develop these areas, it could potentially bring significant benefits to Cross River State, such as job creation, increased revenue from oil and gas activities, and improved infrastructure. I have been assured by knowledgeable industry players that, with the proper approach, Cross River State stands a very good chance to benefit from this development under the Petroleum Industry Act (PIA 2021).

SOME ACADEMIC LITERATURE AND REFERENCES

In other not to run the risk of making this paper too academic and bore some readers with citations and references, I decided to just go straight to the point and expound my views. This notwithstanding, as an academic scholar, I am duty-bound to provide verifiable proof that this is not just a write-up based on my imagination and or experience in the oil and gas industry. As such, kindly find in this section, some literature reviews supporting my views:

A study by Kogbe et al. (2001) investigated the stratigraphy and sedimentation of the Cross River Basin. The study identified several potential hydrocarbon plays, including the Akata-Agbada Formation and the Benin Formation, and recommended further exploration and drilling to fully evaluate the basin’s potential.

Another study by Oloto et al. (2013) assessed the hydrocarbon prospectivity of the Cross River Basin and identified several potential plays, including the Akata-Agbada and the Benin Formations. The study recommended further exploration and seismic surveys to identify specific targets for drilling.

Environmental concerns have been identified as a major challenge to oil and gas development in Cross River State. A study by Anifowose et al. (2018) evaluated the environmental impacts of oil and gas exploration and production activities in the Niger Delta region, including Cross River State. The study found that oil spills, gas flaring, and other environmental impacts have led to significant ecological and health consequences, and recommended the implementation of stronger regulatory frameworks and environmental management systems to mitigate these impacts.

The role of government policy in oil and gas development in Cross River State has also been explored. A study by Egbobawaye and Ajuwa (2016) evaluated the effectiveness of government policies in promoting local content development in Nigeria’s oil and gas industry and recommended the establishment of more effective policies to promote local capacity building and the participation of indigenous companies in the industry.

Finally, the potential for shale gas exploration and production in Cross River State has also been studied. A study by Okpoko et al. (2018) assessed the shale gas potential of the Calabar Flank in Cross River State and identified several potential shale gas plays. The study recommended further exploration and evaluation of these plays to determine their economic viability.

CONCLUSION

In conclusion, despite the challenges and setbacks that Cross River State has faced in the development of its oil and gas resources, there is still hope for a bright future. The state possesses favorable geological formations, undiscovered significant oil and gas reserves, and the potential for shale gas production (in the near future upon approval by the regulatory agency). The presence of hydrocarbon deposits in neighboring states and countries further supports the idea that Cross River State is not excluded from being an oil-producing state.

Despite the fact that the state has not been a player in the oil and gas industry, it has several oil and gas reserves, particularly the Odukpani oil field, Bakassi, Akpabuyo and Calabar Soth fields, the Akpet Central Field, and the Ogoja gas field. This paper highlights the basic conditions that a state must meet to be an oil-producing state, and Cross River State meets most of these conditions. Unfortunately, the lack of a favorable regulatory framework is the main challenge the state faces.

I am confident in my belief that Cross River State has the full potential to become an oil-producing state in Nigeria, the provision of guidance for the way forward is available, unfortunately, since the oil and gas industry is a very brutal one that thrives best in privacy, any attempt to go beyond the scope of this paper would compromise the possible strategies to get Cross River State to her deserved position.

Finally, it is time for Cross Riverians to regain their faith in the state’s oil and gas potential and work together toward its development. The state has what it takes to attract investors, create jobs, and stimulate economic growth through the responsible exploration and production of oil and gas. With the right strategies, commitment, and collaboration among stakeholders, Cross River State can achieve its status as an oil-producing state and contribute to the overall development and prosperity of Nigeria.

REFERENCES

1. Ako, B. D., & Edet, A. E. (2013). Oil and Gas Development in Cross River State, Nigeria: Prospects and Challenges. Journal of Sustainable Development, 6(2), 60-69.
2. Edet, A. E., & Ako, B. D. (2014). Hydrocarbon potentials and environmental impacts of oil and gas exploration and production in Cross River State, Nigeria. Journal of Environment and Earth Science, 4(2), 75-84.
3. Oko, E. E. (2017). An overview of the oil and gas industry in Nigeria: prospects, challenges and the way forward. International Journal of Business and Social Science, 8(4), 45-54.
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6. Udo, I. A., & Ekwe, E. C. (2018). The role of public-private partnerships in the development of oil and gas infrastructure in Nigeria: A case study of Cross River State. Journal of Sustainable Development in Africa, 20(2), 105-118.
7. Akpan, U. G., & Ekpo, M. A. (2014). Oil exploration and community development in Nigeria: A study of Eket Local Government Area in Akwa Ibom State. International Journal of Science and Research, 3(7), 446-450.
8. Bwala, S. S., & Ali, M. A. (2015). The impact of oil exploration and production on the environment in Nigeria: a case study of Niger Delta region. American Journal of Environmental Protection, 4(6), 320-328.
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Dr. Maurice O. Ekong is an Environmentalist and an Oil and Gas Expert with over 20 years of experience in the upstream and downstream sectors of the industry, he writes from Calabar Municipality, Cross River State.

NB: Opinions expressed in this article are strictly attributable to the author, Dr. Maurice O. Ekong, and do not represent the opinion of CrossRiverWatch or any other organization the author works for/with.