The Shell Petroleum Development Company, operator of the SPDC joint venture has unveiled eight Host Community Development Trusts in Bayelsa State, a critical step for unlocking the $56million earmarked for development in line with the provisions of the Petroleum Industry Act (PIA) 2021. The $56.13 million represents funds to be paid this year by SPDC JV and Shell’s deep-water subsidiary, Shell Nigeria Exploration and Production Company Limited (SNEPCo) as contribution to HCDTs.
This bold step in the implementation of the provisions of the PIA earned commendation from the Bayelsa State Government, regulators, partners as well as communities for what is regarded as an industry milestone.
The eight Trusts are among 22 that have been incorporated in SPDC JV’s areas of operation in Imo, Delta, Rivers and Bayelsa states, representing more than half of the total 41 which the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has so far approved for host communities. “This is indeed a milestone which will ensure progress of the communities,” said Governor Duoye Diri during the unveiling ceremony in Yenagoa.
With its knowledge of the Niger Delta from over 60 years of operations, SPDC is managing a seamless transition from the Global Memorandum of Understanding (GMoU) initiative which it introduced in 2006 to HCDTs, a key provision of the PIA enacted in August 2021. SPDC engaged more than 300 communities on the provisions of the Act, their roles and responsibilities, the obligations of oil and gas companies and facilitated grouping of communities and nominations for trustees. It also assisted in the development of a needs assessment and development plan for communities.
Stakeholders at the unveiling, held at the state capital, Yenagoa, charged the incorporated Community Trusts to work towards development in the Niger Delta through peaceful co-existence and collaboration with oil companies. Governor Diri, represented by the state’s Commissioner for Mineral Resources, Dr. Ibieri Jones, said: “No meaningful development can take place without an enabling environment. With dialogue we can always resolve issues and that is the only way it will take the region to where we want it to be.”
SPDC Managing Director and Chairman, Shell companies in Nigeria, Osagie Okunbor, in an address read by the General Manager Corporate Relations, Igo Weli, said the PIA would not deliver the intended development if “communities allow internal strife and chieftaincy struggles to negatively impact the setting up of or operations of the Trusts.” He stressed; “Regardless of the noble intentions of the PIA as well as the moral and financial support of government, SPDC and other operators, the development of communities ultimately rests on the shoulders of community people themselves.”
The Chief Executive of NUPRC, Gbenga Komolafe, commended the early incorporation of the Trusts and charged them to be guided by the provisions of the PIA in their operations. He was represented by Manager, Host Communities Development in NUPRC, Omolade Awah.
The Chief Upstream Investment Officer, NNPC Upstream Investment Management Services (NUIMS), Bala Wunti, represented by Senior Adviser, Stakeholder Relations, Joy Eguahon, said there were “high expectations for communities to collaborate with industry stakeholders for peaceful coexistence. Systems should be in place to address conflicts or grievances through dialogue that ensures resolutions that are beneficial to all the parties.”
Speaking on behalf of his colleagues, the Chairman of Gbarain/Ekpetiama Trust, Ebikesee Johnson, thanked SPDC and communities for the confidence reposed in them, and enjoined trustees to ensure transparency and accountability in discharging their duties.
The eight Trusts that were unveiled are expected to appoint Management Committees in collaboration with their communities, while they will in turn set up Host Community Advisory Committees. This will complete the new community development structure under the PIA and enable the Trusts to begin to receive funds and commence operations. The Act stipulates funding of the Trusts from 3 per cent allocation of the actual operating expenditure of an oil company in the preceding year. The SPDC JV is working towards the incorporation of a total of 33 Trusts before the end of the year.