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Shell unveils $56m for host communities development trusts

by Business News Report

Shell Petroleum Development Company (SPDC), has unveiled eight Host Community Development Trusts, HCDTs, 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 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. Stakeholders at the unveiling, held in Yenagoa, charged the Community Trusts that have been incorporated to work towards development in the Niger Delta through peaceful co-existence and collaboration with oil companies.  

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 Act 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 added; “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.” In his remarks, the Chief Executive of NUPRC, Gbenga Komolafe, represented by Manager, Host Communities Development in NUPRC, Omolade Awah commended the early incorporation of the Trusts and charged them to be guided by the provisions of the PIA in their operations.  

Also, the Chief Upstream Investment Officer, NNPC Upstream Investment Management Services (NUIMS), Bala Wunti, who was represented by Senior Adviser, Stakeholder Relations, Mrs. Joy Eguahon, said there were “high expectations for communities to collaborate with industry stakeholders for peaceful co-existence. Systems should be in place to address conflicts or grievances through dialogue that ensures resolutions that are beneficial to all the parties.” Bayelsa State Governor, Senator Douye Diri, who was represented by the Commissioner for Mineral Resources, Dr. Ibieri Jones, described the unveiling as a milestone which would ensure progress in the communities. He 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.”

According to Abimbola Essien-Nelson, Media Relations Manager, Shell companies in Nigeria, “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 which was signed into law 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. The $56.13 million represents funds to be paid this year by SPDC JV and Shell’s deep-water subsidiary, Shell Nigeria Exploration & Production Company Limited (SNEPCo) as contribution to HCDTs in line with PIA requirements. 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.” Speaking on behalf of his colleagues, the Chairman of Gbarain/Ekpetiama Trust, Mr. Ebikesee Johnson, thanked the SPDC and communities for the confidence reposed in them, and enjoined trustees to ensure transparency and accountability in discharging their duties.

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