Located in Ohaji\Egbema Local Government Area (LGA) of Imo State, the $700 Million Assa North and Ohaji South (ANOH) Gas Development Project—operated by Shell Petroleum Development Company (SPDC) and Seplat Petroleum Development Company—is one of the one of the seven critical gas development projects (7CGDP) initiated by the Federal Government to reverse Nigeria’s energy poverty and close the demand-supply gap in the domestic gas market while complementing the federal government’s objective to meet the target of generating at least 15 gigawatts (GW) of electricity by 2020. ANOH Gas Processing Company Limited (AGPC), operated by Seplat Petroleum Development Company, was incorporated for the purpose of processing future wet gas production from the upstream unitized gas fields at OML 53 & OML 21 located in Ohaji/Egbema LGA. When completed, ANOH’s 4.3 trillion cubic feet (TCF) field will produce 600 million standard cubic feet (mmscf) of gas per day, the energy equivalent of about 2,400 megawatts which will provide uninterrupted electricity to about 2.4 million homes. The ANOH project is also intended to feed the existing eastern, western, and northern gas pipeline systems of Nigeria.
This Ford Foundation-supported report titled, Natural Resource and Benefit – Sharing Negotiations between Host Communities and Extractive Companies: A Case Study of Assa North and Ohaji South [ANOH] Gas Development Project, examines the effectiveness of stakeholder engagement practices and benefit-sharing negotiations between ANOH project operators and their host communities. The Global Memorandum of Understanding (GMOU) is the most popular instrument for codifying the negotiations and agreements between the extractive companies and host communities. The GMOUs clarify what the host communities are entitled to, as their own share of the resource extraction activities taking place in their ancestral fields. Like a mixed bag of lollies, this report captures both the good practice and ongoing challenges arising from the negotiation of costs and benefits between ANOH operators—SDPC and Seplat—and the host and impacted communities. It examines whether the GMOUs are enforceable contracts that transfer real benefits to host communities and whether local stakeholders engaged the operators during these negotiations from a place of empowerment. Real benefits are determined by assessing whether local communities can overcome the power asymmetry characterising the relationship between them and the extractive companies and hold investors accountable to their commitments.