Nearly five years after the Petroleum Industry Act (PIA) set timelines for establishing Host Communities Development Trusts (HCDTs), Sumedha Energy Limited a joint venture partner operating Oil Mining Lease (OML) 13 in Akwa Ibom State, has unveiled a comprehensive needs assessment expected to guide development projects across host communities in Akwa Ibom State.
According to a statement released by Sumedha’s spokesperson in Akwa Ibom State, the 624-page needs assessment report, presented on Monday in Uyo, identifies priority interventions in healthcare, education, infrastructure, water and sanitation, youth empowerment, livelihoods, human capital development and environmental sustainability across 11 oil-producing local government areas.
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Under Section 235(7) of the PIA, operators must undertake a needs assessment that forms the basis of a Community Development Plan, which determines projects to be executed by the Host Communities Development Trust.
The law also makes the Community Development Plan a prerequisite for the trust’s registration. Regulation 7(f) of the Nigerian Upstream Petroleum Host Communities Development Regulations lists the plan among the conditions that must be fulfilled before the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) approves the registration of an HCDT.
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However, Section 236 of the PIA requires operators of existing oil mining leases to incorporate the trust within 12 months of the Act taking effect. The Act came into force in August 2021, meaning operators of existing leases were expected to establish their trusts by August 2022.
Failure to comply attracts sanctions.
Under Regulation 9 of the Host Communities Development Regulations, the NUPRC may issue a default notice directing an operator to establish the trust within 45 days after the deadline. Operators that fail to comply become liable to an administrative penalty of $2,500 per day until the trust is incorporated, while persistent non-compliance may lead the Commission to recommend revocation of the lease or licence.
Development roadmap
The statement said the Chairman of the Board of Trustees of the OML 13 Host Communities Development Trust, Ekpris Urujzian, described the report, while presenting it, as an evidence-based framework that would guide resource allocation and development interventions across the affected communities.
He said the report was developed through consultations with community members and other stakeholders to ensure projects reflect local priorities.
The statement said a member of the Trust, Festus Sunday, said the assessment was commissioned by NNPC Exploration and Production Limited (NEPL) which was awarded the asset and Sumedha Energy Limited, formerly Natural Oilfield Services Limited.
According to him, the study covered Eastern Obolo, Onna, Mkpat Enin, Ikot Abasi, Eket, Esit Eket, Ibeno, Etinan, Oruk Anam, Nsit Ubium and Urue-Offong/Oruko local government areas.
He said recommendations were developed through field assessments, stakeholder engagements and community consultations.
Regulator welcomes report
According to the statement, the NUPRC representative, Adeniji Titilayo described the report as an important milestone in implementing the host community provisions of the PIA.
She said the assessment provides a credible basis for identifying and prioritising projects in host communities and urged the Trust to ensure that the recommendations translate into measurable improvements in living conditions.
Mrs Titilayo also stressed the importance of transparency, accountability, stakeholder participation and effective monitoring during project implementation.
She reaffirmed the Commission’s commitment to ensuring compliance with the PIA’s provisions.
PREMIUM TIMES reported that a recent report revealed that while many HCDTS in Akwa Ibom show governance gains, they lack inclusion and energy transition.
Also speaking, NEPL’s Deputy Chief Operating Officer for OML 13, Auwal Ya’u, said the company remained committed to funding approved development projects under the Trust.
Community relations official Susan Bassey described the unveiling as the culmination of extensive collaboration among stakeholders and expressed optimism that implementing the recommendations would improve living conditions in the affected communities.
The report recommends investments in critical infrastructure, healthcare, education, water and sanitation, youth development, environmental sustainability and stronger monitoring systems.
Company explains delay
The unveiling comes more than three years after the statutory deadline for establishing host community trusts for existing oil mining leases.
In July 2019, the Nigerian National Petroleum Corporation, now Nigerian National Petroleum Company Limited, and Sterling Oil Exploration and Energy Production Company (SEEPCO) signed a $3.15 billion Financing and Technical Services Agreement for the development of OML 13.
Sumedha is a subsidiary of SEEPCO.
When first commercial oil production from the asset was announced in May 2024, NNPC said production was being undertaken by NNPC Exploration and Production Limited as licence holder and operator in partnership with Natural Oilfield Services Limited, now renamed Sumedha Energy Limited.
Responding to PREMIUM TIMES’ enquiry on why the Host Communities Development Trust process was completed years after the PIA deadline, despite several other oil operators in Akwa Ibom already implementing their trusts, the company’s spokesperson in the state, Aniekeme Finbarr, attributed the delay to the scale of consultations required.
“The needs assessment took an organic process because it was done with the communities carried along and it is a very large document of over 600 pages,” Mr Finbarr said.
“On comparison with other companies, you must know that everything happens in due time. There are many communities involved. We have 11 local government areas and over 300 communities. I am not sure other companies have that spread. That in itself is a very tedious process. So, we needed to take time and involve the communities. But the communities are happy that it is done now.”
