Host Community Rights Advocates - HCRA

NMDPRA revokes DPR regulations - The Nation Newspaper The Nation Newspaper NMDPRA revokes DPR regulations

HCRA's SUBMISSION/RECOMMENDATIONS TO NMDPRA IN COMPLIANCE WITH THE CALL FOR SUBMISSION TOWARD THE FINALIZATION OF THE NMDPRA REGULATIONS IN COMPLIANCE WITH THE PIA 2021.

(Pls. Reference Our Earlier Post Below For Traction):

20th September 2024

Dr. Joseph Tolorunse
Authority Secretary and Legal Adviser
Plot 1012 Cadastral Zone A00 Central Business District
PMB 609, Garki, Abuja, FCT.

Dear Sir,
RECOMMENDATIONS FOR MIDSTREAM AND DOWNSTREAM OPERATIONS UNDER THE NMDPRA HOST COMMUNITY DEVELOPMENT TRUST REGULATIONS 2024
INTRODUCTION

The Host Community Rights Advocates (HCRA), a non-profit and non-governmental organisation (NGO) dedicated to empowering
and advocating for communities impacted by oil and gas operations in Nigeria, commends the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for developing the regulatory framework for Host Community Development Trusts (HCDTs) under the Petroleum Industry Act (PIA) 2021.

As NMDPRA finalizes the framework, it is essential that the regulations ensure fairness, transparency, and equity for all host communities, particularly those in midstream and downstream sectors. These communities, affected by pipeline infrastructure, depots, and tank farms, deserve appropriate consideration under the Host Community Development Trust (HCDT) system. This submission provides recommendations aimed at ensuring that midstream and downstream host communities are properly represented and adequately benefit from the HCDT framework..

RECOMMENDATIONS FOR MIDSTREAM HOST COMMUNITIES
The midstream oil and gas sector in Nigeria plays a significant role in processing, transporting, and distributing natural gas and crude oil. Communities hosting pipeline infrastructure or related midstream activities have unique needs that must be addressed through appropriate regulations.

1. Proportional Sharing of HCDT Based on Revenue Contributions
The distribution of HCDT funds should be proportionate to the revenue generated by host communities. For instance, where Accugas operates gas sales to large customers such as Calabar Generation Company and Lafarge Cement Plant, these host communities contribute a significant share of Accugas's revenue. Consequently, their contributions should be reflected in the proportional allocation of 3% of operating expenses as mandated by the PIA.

PIA Reference: Section 240 (2)(a) – Establishing the 3% funding for HCDTs.

Recommendation: HCDT contributions in the midstream sector should be calculated based on revenue contributions from host communities, ensuring a fair distribution of the 3% operating expense allocation mandated by the PIA, so that those generating higher revenues receive a fair share of the benefits and are not overlooked. This would create transparency and fairness in the allocation process.

2. Clear Regulation on Fulfilment of Outstanding Community Development Projects and Social Impact Engagements
There should be a regulatory requirement to ensure that, operators are compelled by regulation to fulfil outstanding commitments, such as MOUs to host communities before embarking on new community development projects under the HCDT structure. This provision ensures that operators who have delayed or neglected previous commitments (such as social impact or community development projects) are held accountable. These regulations will prevent operators from avoiding their historical obligations and will ensure that communities benefit from prior commitments made by operators and are not neglected once the HCDT is implemented.

PIA Reference: Section 240 (2)(e) – Community development projects funded by HCDTs.

Recommendation: We propose that NMDPRA introduce clear regulations mandating operators to discharge any outstanding obligations related to community development projects before initiating the new HCDT framework. This will ensure that historical commitments are honoured, maintaining the trust of host communities. Operators with outstanding obligations must discharge their commitments in full, particularly where social impact engagements have been delayed, incomplete or neglected.

3. Mandatory Pre- and Post-Environmental Impact Assessments (EIAs)
The environmental impact of pipeline operations, especially in sensitive regions like Cross River State, is a critical concern for host communities. Operators should be required to conduct both pre- and post-EIAs for their infrastructure projects. These assessments should be made available to host communities, allowing them to understand the environmental and social impacts of oil and gas operations.

PIA Reference: Section 233 (1)(a) – Environmental management in midstream and downstream sectors.

Recommendation: NMDPRA regulations should mandate that operators in the midstream and downstream sectors publicly disclose pre- and post-EIAs for any major pipeline, processing facility, depots, tank farms etc. This ensures that environmental safeguards are in place and host communities are fully informed about the potential risks and mitigations. Regular monitoring of environmental standards must be mandatory to protect local ecosystems and public health.

4. Fair and Equitable Administration of HCDTs Where Host Communities Span Multiple States
Where pipeline infrastructure spans multiple states, as in the case of Accugas’s 128 km and 68 km pipelines between Cross River and Akwa Ibom fair and equitable administration of the HCDT is crucial. Host communities from both states should be equitably represented and should receive benefits in line with their respective contributions to the operator's success. The allocation of funds should reflect each community’s contribution, and there should be no disproportionate benefit to communities in one state over another.

PIA Reference: Section 242 (1) – Establishing HCDTs for host communities.

Recommendation: HCDT administration must ensure that where pipeline infrastructure crosses multiple states, the allocation of funds and representation on Trust, Management and Advisory committees are done fairly, with due consideration for the communities' contributions to the operator’s revenue.

5. Regular Environmental Safety Audits
Pipeline infrastructure presents environmental and safety risks to host communities. To ensure safety and compliance, operators should be subject to regular audits of their environmental safety practices. Any violations of safety standards should be met with clear penalties, ensuring that host communities are protected.

PIA Reference: Section 233 (2) – Safety audits and compliance in midstream operations.

Recommendation: NMDPRA regulations should mandate regular environmental safety audits of midstream operators, particularly for pipeline operations. Penalties should be enforced for violations of safety and environmental standards.

6. Recognition of All Host Communities Contributing to Revenue
All host communities that contribute to the revenue generation of an operator, whether directly or indirectly, should be recognized under the HCDT. This includes communities that may be connected through third-party pipeline infrastructure but still play a crucial role in the operator's overall success.

PIA Reference: Section 240 (1) – Definition of host communities.

Recommendation: Regulations should ensure that host communities affected by third-party infrastructure receive the same benefits under the HCDT as those directly under operator-owned pipelines.

7. Mechanism for Allocating HCDT Between Upstream and Midstream Host Communities
There must be a clear mechanism for determining how HCDT funds are allocated between upstream production communities and midstream host communities that host gas sales customers. In cases like Accugas, which operates in both sectors, the share of HCDT contributions should reflect the distinct roles these communities play in revenue generation. This mechanism would ensure that both production facilities and pipeline sales communities are compensated fairly for their contributions. Communities that host production facilities should be allocated funds commensurate with the risks and contributions associated with production, while midstream host communities, which generate significant revenue through sales, should receive their fair share.

PIA Reference: Section 240 (3)(c) – Funding distribution for HCDTs.

Recommendation: NMDPRA should develop a framework for the equitable distribution of HCDT funds between upstream and midstream communities, ensuring that both sectors are adequately represented.

RECOMMENDATIONS FOR DOWNSTREAM HOST COMMUNITIES
The downstream sector has distinct challenges, especially for communities hosting depots and tank farms. These communities face significant environmental, social, and economic impacts and must be considered within the broader HCDT framework.

1. Specific Clauses for Host Communities in the Downstream Sector (Depots and Tank Farms)
Specific clauses, similar to how pipeline communities are accommodated in the midstream sector. should be included in the regulations to address the unique concerns of host communities in the downstream sector, particularly those hosting depots and tank farms. These communities face unique challenges, including environmental pollution and social impacts such as emissions, oil spills, traffic congestion, and health risks, which are distinct from the midstream sector. By explicitly including these communities under the HCDT, their rights can be protected, and operators will be held accountable for the impact of their operations.

PIA Reference: Section 240 (2)(d) – Addressing community-specific issues under HCDTs.

Recommendation: NMDPRA should establish specific clauses within the HCDT regulations for downstream host communities, ensuring that depots and tank farms are treated with the same level of environmental and social accountability as pipeline communities in the midstream sector.

ADDITIONAL IMPORTANT PROVISIONS FOR MIDSTREAM AND DOWNSTREAM SECTORS
1. Transparency in HCDT Operations
All operators, whether in the midstream or downstream sectors, should be subject to annual reporting requirements detailing their HCDT contributions, the disbursement of funds, and community development projects. These reports should be made publicly available and presented to the host communities in question.

PIA Reference: Section 245 (1) – Reporting and accountability requirements for HCDTs.

Recommendation: NMDPRA should enforce transparency by requiring annual reports on HCDT activities to be made publicly available.

2. Legal Framework for Conflict Resolution
Disputes between operators and host communities over the disbursement of HCDT funds or environmental compliance should be subject to a clear legal framework. NMDPRA should establish a dispute resolution mechanism that allows communities to seek legal remedies for non-compliance.

PIA Reference: Section 247 – Dispute resolution mechanisms for host communities.

Recommendation: NMDPRA should establish a robust legal framework for conflict resolution, allowing host communities to seek legal remedies for non-compliance.

3. Grievance Redress Mechanism
Aside from the arbitration clause, an unambiguous process should be established for communities to raise concerns and grievances with operators, ensuring timely and fair resolutions.

PIA Reference: Section 247 (3) – Grievance mechanisms for host communities.

Recommendation: NMDPRA should implement a structured grievance redress system to ensure host communities' concerns are addressed fairly and promptly.

CONCLUSION
The above recommendations seek to ensure that midstream and downstream host communities are equitably represented and benefit from the HCDT framework under the PIA 2021. The inclusion of these provisions will help NMDPRA build a sustainable, transparent, and inclusive regulatory framework for the oil and gas industry, fostering trust and mutual benefit between operators and host communities across Nigeria.

The recommendations proposed will also ensure that all host communities, regardless of their contribution to production or sales, receive the economic, social, and environmental benefits they are entitled to under the PIA 2021.

Yours sincerely,
Dr. Maurice Ekong
Lead Coordinator,
Host Community Rights Advocates (HCRA)
08138988980
[email protected]

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Exciting and heart warming news from NUPRC!
Their new alliance with UK experts to enhance decommissioning practices is a significant step forward. This news aligns perfectly with our latest article on Cross River State's potential in the oil and gas sector.

We hope this will also bring attention to the capped and abandoned wells in Cross River State, paving the way for renewed exploration and development. Let’s support this initiative and work towards opening new opportunities for our communities in Cross River State!

CROSS RIVER STATE'S MARGINALIZATION IN NIGERIA'S OIL AND GAS INDUSTRY: AN HISTORICAL, TECHNICAL, AND REGULATORY PERSPECTIVE WITH A WAY FORWARD

By Maurice Ekong, PhD.

INTRODUCTION
Cross River State is endowed with significant natural resources, including oil and gas reserves. Despite this wealth, the state remains conspicuously absent from the list of Nigeria's oil and gas-producing states. This exclusion has far-reaching implications for the state's economic development and the well-being of its communities. This article explores the historical, technical, and regulatory factors that have contributed to Cross River State's exclusion and marginalization while highlighting the role of the Petroleum Industry Act (PIA) 2021, the emergence of Renaissance Africa Energy (RAE), and other relevant legislative provisions that offer a glimmer of hope for the state.

HISTORICAL CONTEXT
The history of Cross River State's exclusion from the league of oil and gas producing states in Nigeria began between the 1950s and 1960s, when Shell Petroleum Development Company of Nigeria Limited (SPDC) conducted seismic explorations in the region. These early explorations identified several oil wells, but they were ultimately capped and abandoned due to their perceived non-commercial viability. This decision set a precedent, and for decades, the state has been largely overlooked in oil and gas development plans of the nation.

The abandonment of these wells was based on the technology and economic conditions of the time, which deemed the hydrocarbon resources in Cross River State insufficiently profitable. This early verdict of non-commercial viability imposed by SPDC on the oil wells in Cross River State has had long-lasting consequences. As other Niger Delta states began to benefit from their oil and gas production, Cross River State was effectively sidelined. This exclusion was further compounded by the state’s loss of its oil-rich Bakassi Peninsula to Cameroon following the 2002 International Court of Justice ruling, and the loss of 76 oil wells to neighboring Akwa Ibom State 10 years later. These further diminished its standing as an oil producing state.

TECHNICAL FACTORS AND CHALLENGES CONTRIBUTING TO CROSS RIVER STATE’S EXCLUSION FROM THE OIL AND GAS INDUSTRY
The exclusion of Cross River State from the oil and gas industry is closely tied to the technical and economic challenges faced during early exploration activities. In the 1950s and 1960s, most of the wells identified in Cross River State were located onshore. Unfortunately, onshore wells were considered less attractive than offshore sites, which were more likely to yield larger reserves. This led to the state being excluded from the oil-driven economic growth that transformed other Niger Delta states. For decades, this initial exclusion has left Cross River State without the benefits and recognition afforded to other oil-producing states.

Moreover, the technology available during this period was not advanced enough to make the extraction of oil from these wells commercially viable. The financial implications further exacerbated the situation. The high Operating Expenditure (OPEX) associated with these wells, particularly, the substantial costs of laying an underwater pipeline (to convey the crude oil for processing/export) from Cross River State to SPDC’s Bonny Terminal in Rivers State, conclusively rendered these wells economically unfeasible. Simply put, the OPEX was too high relative to the expected revenue, leading to the decision to classify the wells as non-commercially viable. These factors combined to shape the long-standing perception that the oil resources in Cross River State were not worth pursuing, ultimately contributing to the state’s exclusion from the broader oil and gas industry.

In light of ongoing discussions and speculations surrounding the potential future sale of Nigeria’s oil to secure loans, it is crucial to reassess the untapped oil and gas resources in Cross River State. Historically, the wells abandoned by SPDC in the state were capped and classified as non-commercially viable, primarily due to the technological limitations and economic conditions of the time. However, advancements in extraction technology and renewed industry interest in maximizing resource potential have created a new opportunity for these wells to play a significant role in Nigeria’s energy landscape.

The wells in question, which were located onshore and spread across several communities in Akamkpa, Akpabuyo, Bakassi, Biase, Calabar South, Calabar Municipality, and Odukpani LGAs, were initially overlooked due to the challenges of the 1950s and 1960s. Today, however, the application of modern techniques such as hydraulic fracturing, enhanced oil recovery (EOR), and horizontal drilling has proven successful in similar geological formations, as evidenced by the positive outcomes at the OML 114 marginal field, which is located within the same geological zone as these wells and operated by Moni Pulo (Petroleum Development) Limited, an indigenous E&P company. This suggests that the wells in Cross River State may certainly still contain commercially viable quantities of hydrocarbon, presenting a renewed opportunity for exploration and development.

With Nigeria facing the bleak possibility of leveraging its oil reserves as collateral for loans, the previously abandoned and unfactored potential of Cross River State’s oil wells presents a game-changing opportunity. By bringing these wells back into consideration, the Federal Government could significantly increase the nation’s oil reserves. This untapped resource could also reduce the pressure on more heavily exploited oil fields, ensuring a more balanced and sustainable approach to resource management.

Moreover, reactivating these wells could contribute to Nigeria's long-term energy security and economic stability. The potential boost in recoverable reserves would not only enhance the country’s export capacity but also attract further investment in the region, leading to job creation and economic development in Cross River State. This approach aligns with global trends, where governments are increasingly looking to maximize existing resources before venturing into new exploration areas.

One can arguably note that, the capped and abandoned wells in Cross River State represent an underexplored asset that could play a pivotal role in Nigeria’s future oil strategy. Leveraging these resources would not only provide immediate economic benefits but also strengthen the nation’s strategic position in the global energy market. As the Federal Government considers its options for the future, the opportunity to tap into these reserves should be viewed as a critical element of Nigeria's broader economic and energy policies.

REGULATORY FACTORS, LEGAL FRAMEWORKS AND ECONOMIC IMPLICATIONS
Regulatory oversight has been a significant factor in Cross River State’s exclusion from Nigeria’s oil and gas industry. One of the most critical factors contributing to the state’s exclusion from the nation's oil and gas industry is the regulatory and institutional framework that governs the sector. For decades, the state’s potential as an oil and gas producer was not recognized by either the Federal Government or its regulatory agencies, perhaps due to the negative report by SPDC following their 1950s to 1960s exploration activities in the state.

This exclusion and lack of recognition was compounded by the Department of Petroleum Resources’ (DPR, now the Nigerian Upstream Petroleum Regulatory Commission, NUPRC) refusal/reluctance to digitize oil and gas fields/blocks/acreages in Cross River State for potential investors. This regulatory neglect has had profound implications, leaving the state excluded from key policy decisions, oil block allocations, and the benefits of the 13% derivation fund allocated to oil-producing states.

However, the enactment of the Petroleum Industry Act (PIA) 2021 will hopefully mark a shift in Nigeria’s oil and gas regulatory landscape. The PIA introduces a legal framework that supports the exploration and development of previously neglected resources, offering a potential avenue for Cross River State to rectify historical imbalances. Key provisions of the PIA relevant to the state include:

A. Environmental Remediation (Section 102):
This section mandates companies to rehabilitate and restore sites affected by their operations, addressing the environmental damage caused by decades of neglect. For Cross River State, this is particularly important and offers a legal basis to address the environmental degradation caused by the long-abandoned wells, ensuring that any future development is conducted sustainably. It would equally play a crucial role in restoring the ecological balance of the affected host communities.

B. Environmental Impact Assessments (Section 104):
The PIA requires thorough environmental impact assessments (EIAs) and the implementation of robust environmental management plans. These requirements are crucial for addressing the potential risks associated with reactivating the capped wells in Cross River State, ensuring that development does not exacerbate existing environmental challenges. Furthermore, RAE’s acquisition of SPDC’s assets includes a number of these wells, which, with the application of modern technology, could become commercially viable. This would not only bring economic benefits to the state but also address the historical injustices that have kept it on the margins of the industry.

C. Local Content (Section 27 and Section 68):
The PIA mandates oil companies to prioritize Nigerian goods, services, and labor, with specific provisions to increase local participation in the oil and gas industry. For Cross River State, this could mean new opportunities for local businesses, job creation, economic development and a boost to her Internally Generated Revenue (IGR). The emphasis on local content could also lead to capacity-building initiatives, ensuring that the state's workforce is equipped with the skills needed to participate in the industry.

Additionally, the lack of digitization and data availability, exacerbated the state’s inability to attract investment. Without access to accurate and up-to-date information, potential investors have been unable to make informed decisions about the viability of oil and gas projects in Cross River State. This lack of transparency and accessibility has significantly hindered the state's participation in the oil and gas industry.

THE EMERGENCE AND ROLE OF RENAISSANCE AFRICA ENERGY (RAE)
In recent developments, Renaissance Africa Energy (RAE), a consortium of five energy companies, has emerged as a potential game-changer for Cross River State. RAE’s acquisition of Shell’s entire 30% stake in the Shell Petroleum Development Company of Nigeria Limited's Joint Venture (SPDC-JV) presents a unique opportunity to address the historical imbalances that have plagued Cross River State.

RAE’s focus on indigenous ownership and control of oil and gas assets aligns with the broader goals of the Petroleum Industry Act (PIA) 2021, which emphasizes local content and environmental remediation. RAE’s possible reactivation and revitalization of the capped and abandoned wells in Cross River State offers a chance to overturn the historical inaccuracies that have led to the state’s marginalization. By leveraging modern technology and adhering to the PIA’s provisions, RAE could breathe new life into the state’s oil and gas sector, driving economic growth and development.

CONCLUSION
The exclusion of Cross River State from Nigeria’s oil and gas industry is the result of a complex interplay of historical, technical, and regulatory factors. From the early dismissal of the state’s oil potential by SPDC to the regulatory hurdles imposed by the then regulators of the industry, the Department of Petroleum Resources, Cross River State, has faced numerous challenges in its quest to become a recognized oil producing state. However, with the right legislative support and strategic investment, this long standing marginalization can be reversed. Indeed, the emergence of Renaissance Africa Energy (RAE) and the opportunities presented by the PIA 2021 offer a glimmer of hope that these historical injustices can be rectified.

By addressing the technical challenges of reactivating abandoned wells, there’s hope to turn around the fortunes of Cross River State. The state’s inclusion in Nigeria’s oil and gas industry is not only a matter of economic necessity but also one of justice and equity. It is time for Cross River State to reclaim its rightful place in Nigeria’s oil and gas narrative, and with the right investments and regulatory support, this long-overdue renaissance can finally become a reality.

Maurice Ekong, PhD, is an Oil and Gas Expert with over 25 years of cognate & hands-on experience in the industry. He is the Lead Coordinator of Host Community Rights Advocates (HCRA).

RENAISSANCE AFRICA ENERGY (RAE):
A CATALYST FOR CROSS RIVER STATE'S OIL AND GAS RENAISSANCE

Maurice Ekong, PhD.

INTRODUCTION
Renaissance Africa Energy (RAE), a consortium of five energy companies consisting of, four indigenous and one international oil company, has a mission is to harness Nigeria’s abundant energy resources as a catalyst for the present and future. The company has significantly impacted Nigeria's oil and gas sector by acquiring Shell’s entire 30% stake in the Shell Petroleum Development Company of Nigeria Limited's Joint Venture (SPDC-JV).

This acquisition indicates a major shift towards indigenous ownership and control of critical oil and gas assets. It presents unique opportunities, particularly for Cross River State, which has historically been marginalized in the oil and gas sector. One of RAE’s potential area of impact is expected to be in the reactivation and revitalization of once capped and abandoned oil wells, many of which are situated in the southernmost flank of Cross River State. These wells, which were once deemed to be commercially unviable, now represent a potential untapped resource, that is capable of transforming the state's economic fortunes and financial landscape. Indeed, the reactivation/revitalization of these oil wells in the state, holds immense potential for transformative economic growth, community development, and environmental remediation.

BACKGROUND
Renaissance Africa Energy (RAE) is a consortium of five energy companies, and was formed to acquire key assets from SPDC, RAE aims to increase indigenous ownership and participation in the oil and gas industry. This acquisition is poised to address historical imbalances and generate new opportunities for a state like Cross River.

Historically, Cross River State, with her proven oil and gas reserves, has been marginalized in Nigeria’s oil and gas sector due to early exploration reports by SPDC during the 1950s and 1960s, which declared the state as not commercially viable for oil and gas operations. This unfavourable assessment has persisted, contributing to the state’s underdevelopment particularly within the oil and gas sector. Unlike other Niger Delta states, Cross River paradoxically remains the only state, where the former regulators of the industry - The Department of Petroleum Resources (DPR) refused to digitize oil and gas fields for potential investors and operators. This inexplicable decision, has in no small measure exacerbated and compromised the state’s economic challenges.

The recent acquisition of SPDC’s assets by RAE offers a widow of opportunity to overturn these historical inaccuracies and stimulate a renaissance of unprecedented oil and gas activities in Cross River State. With the consortium's focus on indigenous ownership and control, there is potential to bring new life to the state’s oil and gas sector through the revitalization of capped and abandoned wells. These wells, primarily located onshore, offer significant advantages for development due to easier access and lower operational costs compared to offshore fields.

A NEW LEASE OF ECONOMIC ACTIVITES FOR CROSS RIVER STATE
The capped and abandoned wells which are located across several Local Government Areas of the state, notably, Akpabuyo, Bakassi, Calabar South, Calabar Municipality, Odukpani, Akamkpa and Biase represent substantial untapped resources. These wells, previously deemed non-viable, could hold significant potentials under modern technological advancements and improved economic conditions. RAE’s expertise and innovative approach to resource extraction can turn these dormant assets into commercially viable operations. The exploitation of these wells is anticipated to drive substantial revenue generation for the state, providing a much-needed boost to the local economy.

Equally, one of the most impactful benefits of RAE’s operations in Cross River State would be the creation of jobs. The revitalization of abandoned wells and the establishment of new projects will require a diverse range of skills, leading to the employment of thousands of locals. Beyond direct employment, RAE’s investment will foster the development of ancillary industries, further amplifying job opportunities. This influx of jobs will not only reduce unemployment but also contribute to skill development and capacity building among the local workforce, ensuring sustainable economic growth.

RAE’s presence in Cross River State will catalyse infrastructure development. The company’s projects will necessitate the improvement of existing infrastructure and the construction of new facilities. This includes roads, bridges, and other essential amenities, which will benefit both the energy sector and the broader community. Improved infrastructure will facilitate better access to markets, enhance mobility, and attract further investment to the region.
RAE’s hoped for strategic initiatives in Cross River State align with broader goals of economic diversification and sustainability. By focusing on the development of previously neglected resources, RAE would be contributing to a more balanced economic structure, reducing dependency on a government. Such diversification is crucial for long-term economic resilience and sustainability, ensuring that the state can withstand global market fluctuations and other economic challenges.

LEVERAGING THE PETROLEUM INDUSTRY ACT (PIA) 2021
The PIA 2021 provides a conducive legal framework for exploring and developing these abandoned wells. Key provisions of the Act offer multiple opportunities for Cross River State such as:

Environmental Remediation
Environmental protection is a critical aspect of the Petroleum Industry Act (PIA) 2021, particularly in relation to abandoned oil wells. The wells in Cross River State, abandoned by SPDC for several decades, have posed significant environmental challenges to the local communities. This situation underscores the urgency for Renaissance Africa Energy (RAE) to address the environmental degradation left behind and to prioritize remediation efforts. Relevant sections of the PIA provide a strong legislative framework to support these efforts:

Section 102: This section requires companies to rehabilitate and restore sites affected by their operations, ensuring environmental sustainability. For RAE, this entails a commitment to restoring the abandoned wells in Cross River State. The prolonged abandonment by SPDC has likely resulted in significant ecological damage and health hazards for local communities. By undertaking comprehensive remediation activities, RAE can protect local ecosystems and public health, demonstrating a genuine commitment to sustainable development.

Section 104: This section stipulates that oil companies must conduct thorough environmental impact assessments (EIAs) and implement robust environmental management plans to mitigate pollution and ecological damage. Given the long period of neglect, the need for detailed EIAs is paramount. These assessments will help identify the extent of contamination and guide the development of effective remediation strategies. Implementing robust environmental management plans will not only address existing environmental damage but also prevent future degradation.

The decades-long abandonment by SPDC has left the communities in Cross River State grappling with numerous environmental and health issues. The neglected wells have likely caused soil and water contamination, adversely affecting agriculture and drinking water sources. By addressing these environmental challenges, RAE can rebuild trust with the local communities and contribute to their socio-economic upliftment.

RAE's return to Cross River State presents an opportunity to rectify the environmental neglect and to set a new standard for environmental stewardship in the Nigerian oil and gas sector. Through diligent adherence to the PIA's provisions, RAE can transform the environmental landscape of Cross River State, turning a legacy of neglect into one of restoration and sustainable development.

Local Content
The PIA 2021's emphasis on local content presents significant opportunities for enhancing local economic participation and development in Cross River State. Key sections of the PIA relevant to local content include Section 27 and Section 68.

Section 27: This section 27 of the PIA mandates oil companies to prioritize Nigerian goods, services, and labor. This requirement has profound implications for Cross River State in the following ways:

1. By prioritizing the hiring of local residents, RAEC can significantly reduce unemployment rates in the state. This ensures that the economic benefits of oil and gas operations are felt directly by the community, fostering economic empowerment and reducing poverty levels.
2. The focus on employing local labor necessitates investment in training and capacity-building programs. These programs equip residents with the skills needed to work in the oil and gas sector, promoting long-term economic growth and self-sufficiency within the community.
3. Prioritizing Nigerian goods and services increases business opportunities for local suppliers and contractors, fostering the development of a robust local supply chain. This stimulates economic diversification and supports small and medium-sized enterprises (SMEs) in the region.

Section 68 requires operators to submit a Nigerian Content Plan (NCP), outlining how they intend to maximize the use of local resources. This section's implementation can lead to several positive outcomes for Cross River State:
1. The NCP mandates detailed strategies for local content utilization, ensuring that local considerations are embedded in every project stage. This holistic approach supports the growth of local industries and workforce development.
2. Operators must outline measures for increasing local business participation in their supply chains. This includes preferential procurement policies and partnerships with local firms. For Cross River State, such investments can lead to new industry establishments and revitalization of existing ones, driving economic development.
3. The NCP can include provisions for community development projects, such as building schools, healthcare facilities, and infrastructure. These projects not only improve residents' quality of life but also build goodwill and foster positive relationships between the company and the community.

POTENTIAL CHALLENGES AND RISKS
The revitalization of capped and abandoned wells, while promising, is fraught with challenges and risks:
1. Many of these wells are decades old, with outdated technology and potentially compromised integrity. Re-activating them requires significant technical expertise and investment.
2. Historical grievances and mistrust between oil companies and host communities may hinder project implementation. Building trust and fostering positive relationships will be essential.
3. The profitability of these wells is uncertain. Oil prices fluctuate, and production costs may outweigh revenues. A thorough economic analysis is necessary to assess the project's feasibility.
4. Navigating the complex regulatory environment, including obtaining permits and licenses, can be time-consuming and costly.
5. The potential for oil spills, gas leaks, and groundwater contamination is high, especially given the age of the wells. Rigorous environmental impact assessments and mitigation plans are crucial.

POTENTIAL ECONOMIC IMPACT
The economic impact of revitalizing these wells could be substantial for Cross River State:
1. Successful production will increase government revenue through taxes and royalties.
2. The project will create direct and indirect employment opportunities in various sectors.
3. Increased revenue can be invested in improving roads, electricity, and other essential infrastructure.
4. By prioritizing local suppliers and contractors, the project can stimulate the growth of local businesses.
5. The project could attract foreign investment in the oil and gas sector, leading to further economic development.

However, the economic impact will depend on several factors, including oil prices, production volumes, and the government's ability to effectively manage the revenue generated.

CONCLUSION
The acquisition of SPDC’s assets by RAEC marks a new dawn for Cross River State’s oil and gas potential. Particularly, the impact on the abandoned wells in Cross River State represents a significant opportunity for major oil and gas development. By leveraging the provisions of the PIA 2021, Cross River State can turn historical liabilities into assets, driving economic growth and improving living standards for its people. By adopting a strategic and collaborative approach, the revitalization of capped and abandoned wells can be a catalyst for sustainable development in Cross River State. This initiative has the potential to transform the economic landscape of the state, providing long-term benefits to its people and contributing to the broader goals of increased indigenous ownership and control in Nigeria’s oil and gas sector.

Ultimately, the success of this endeavour depends on RAE’s commitment to responsible and sustainable development, fostering a legacy that benefits both the company and the communities it serves. It should be understood that the journey ahead, while fraught with challenges, holds immense promise for a brighter and more prosperous future for Cross River State and her people.

CALL TO ACTION
For the Cross River State Government:
The Cross River State government must take proactive steps to ensure the revitalization of its capped and abandoned oil wells. Waiting for Renaissance Africa Energy (RAE) to take the lead is not an option. The state government should immediately begin initiatives to attract potential investors and oil developers by highlighting the significant onshore advantages these wells offer. By demonstrating a commitment to facilitating development and overcoming historical challenges, the government can foster an environment conducive to investment and growth. This includes engaging with regulatory bodies to streamline the process of obtaining necessary permits and ensuring that the state’s oil and gas fields are digitized for easy access by potential investors.

For Host Communities:
Members of host communities where these abandoned oil wells are located have a crucial role to play. We urge you to reach out to the Host Community Rights Advocates (HCRA). By collaborating with HCRA, we can compile a comprehensive database of abandoned oil wells in Cross River State. This database will be instrumental in readiness for when the need arises to present such information to interested parties. Your proactive engagement is vital for ensuring that your communities benefit from the upcoming opportunities in the oil and gas sector. Together, we can advocate for sustainable development that benefits everyone in Cross River State.

Let’s join hands to transform the economic landscape of Cross River State, turning it into a beacon of progress and sustainable development in Nigeria’s oil and gas sector.

Maurice Ekong PhD., is an Oil and Gas Expert with over 25 years Cognate & Hands-on Experience in the Sector. He is the Lead Coordinator of Host Community Rights Advocates (HCRA).