Akata Energy Limited has inaugurated the Ilepete and Ilowo Host Community Development Trusts (HCDTs), marking a key milestone in implementing the Petroleum Industry Act (PIA) while intensifying efforts to secure fresh investment to drill new wells.

The company, which owns and operates a 100 per cent stake in Petroleum Prospecting Licence (PPL) 272, said the trusts would provide a framework for transferring the benefits of petroleum operations to host communities through sustainable development projects.

Speaking at the inauguration in Abuja on Monday, Group Managing Director of Akata Energy, Makoji Aduku, said the establishment of the trusts followed nearly two years of regulatory and community engagement processes required under the PIA.

He explained that, beyond obtaining the licence, operators are required to complete technical work programmes, including data acquisition, asset evaluation, development planning, environmental impact assessments and the establishment of Host Community Development Trusts.

“The HCDT process alone takes about nine months. It involves conducting community needs assessments, identifying and validating host communities, securing government recognition and incorporating the trusts with the Corporate Affairs Commission. It is a comprehensive process, so there has been no delay on our part,” Aduku said.

He noted that Akata had maintained peaceful relations with the host communities, adding that consultants conducted extensive needs assessments through consultations and questionnaires to identify projects capable of improving livelihoods.

Despite the progress in community engagement, the company said fresh capital is being raised  for drilling operations.

Aduku said drilling a single well requires between $15 million and $20 million, a level of capital that remains difficult to raise locally.

“We have matured our prospects and discoveries and are now at the stage of raising the capital expenditure required for drilling. Nigeria has the technical expertise, but securing long-term risk capital for exploration and production companies remains a major challenge,” he said.

He added that the company has turned to international investors to demonstrate the commercial viability of the project, its operational capability and its ability to generate sufficient returns to repay investment.

Addressing concerns over declining global appetite for financing fossil fuel projects, Aduku expressed confidence that commercially viable upstream projects would continue to attract investors.

Representing the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Assistant Director Olatokunbo Karimu urged the newly inaugurated trustees to manage community benefits with transparency and accountability.

He said the completed community needs assessments would form the basis of the Community Development Plans and advised trustees to familiarise themselves with the PIA and the Host Community Development Trust Regulations.

Karimu directed the trustees to immediately constitute management committees, establish the required bank accounts and ensure full compliance with governance provisions, warning that fraud, mismanagement and abuse of office could attract law enforcement action.

The company’s Chief Operating Officer, Seun Olakotan, said the establishment of the Trust demonstrates the organisation’s commitment to transparency, peaceful coexistence, community participation and compliance with PIA.

He expressed optimism that the HCDT would promote prudent management and drive projects that improve the welfare of residents in the two host communities and contribute to the wider development of Ondo State.

“The creation of this Trust exemplifies our mutual dedication to sustainable development, harmonious coexistence, transparency, active community participation and compliance with the PIA Act 2021,” he said.

The Ilowo community trust is chaired by Iyapo Folorunsho Nelson while the Ilepete community, all in Ondo state is chaired by Ayadi Olabanji Benjamin.