The plight of oil host communities and the need to ensure that funds allocated to them under the Petroleum Industry Act (PIA) are effectively utilized to deliver meaningful development in host communities came into sharp focus at a recent stakeholder engagement session held with the KEFFESO Host Communities Development Trust (HCDT).
The KEFFESO HCDT serves as the representative body for various oil-producing communities including Koluama 1 and 2, Ezetu 1 and 2, Okumbiri, Foropa, Fish Town, Ekeni, Sangana, Opu, Okumbiribeleu and Oginibiri in Bayelsa State, under the NNPCL/First Exploration & Petroleum Development Company (FIRST E&P) JV.
The Petroleum Industry Act, of 2021, which consigned the Petroleum Act and Petroleum Tax Act of 1967 to history allocated three per cent Host Community Development Fund for the development of oil-host communities. This significant legislation which brings the oil host communities into sharp focus is imbued with revolutionary fervour; for the first time, it created a special fund which ensures that allocated funds are properly channelled to foster tangible development in the oil-producing communities of the Niger Delta and elsewhere.
Given the pivotal role he played in the birthing of the Petroleum Industry Act, his tireless advocacy, and strategic engagements with critical stakeholders within the legislative branch and the oil and gas sector, it is incontestable that the PIA Act has the imprimatur of the Group Chief Executive Officer of the NNPC Ltd, Mele Kyari. This assertion is without prejudice to the unwavering commitment and strong political will exhibited by the Buhari administration which broke the over two decades stalemate of the bill.
The Act created a Host Community Development Trust Fund with the aim to cushion the negative impact oil exploration may have on oil-producing communities. The fund would be managed by a Board of Trustees. Funding for the Trust Fund will be secured from holders of Licenses or leases who will contribute three per cent of the operating expenditures of the previous year in respect of all petroleum operations affecting the host communities.
Kyari’s unbridled enthusiasm and full support of the allocation to oil-producing communities is driven by his strong passion to drive development in oil-producing states, that suffered decades of neglect. In giving a ringing endorsement to the Act, he believes that the emplacement of the Act will galvanize massive development for oil-producing communities.
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