Strengthening Stakeholder Relations via PIA Trust Structure
Peter Uzoho posits that indigenous operator, Petralon 54 Limited, is drawing industry attention for how it is using the PIA’s trust structure not merely as a compliance requirement, but as an extension of its corporate identity
Nigeria’s oil heartland has long wrestled with a paradox: beneath the swamps and creeks of the Niger Delta lie some of the world’s most prolific hydrocarbon reserves, yet the communities living on top of the oil see little of the wealth extracted from their land. In a region where oil spills, gas flaring and decades of mistrust have entrenched suspicion toward industry players, the simple act of winning community consent can make or break an oil project. That reality is one reason the Nigerian government embedded a new legal structure into its sweeping petroleum reform law, the Petroleum Industry Act (PIA) of 2021. Under the legislation, companies operating upstream assets are required to set aside 3 per cent of their operating expenditure annually in dedicated Host Community Development Trusts. These trusts are designed to be run by community-appointed boards, with transparent governance and financial planning, marking the country’s most ambitious attempt yet to link oil production to local development.
Against that evolving backdrop, a relatively small but increasingly visible indigenous operator, Petralon 54 Limited, is drawing industry attention for how it is using the PIA’s trust structure not merely as a compliance requirement, but as an extension of its corporate identity. Just four days after its first oil from the Dawes Island Field, Petralon 54 inaugurated two host community trusts, the Ogoloma Host Community Development Trust (HCDT) and the Koniama HCDT, deepening an 11-year engagement with the Ogoloma, Okochiri and Koniama communities of Okrika Local Government Area in Rivers State. The timing was symbolic. Production start-up is the moment when most operators focus inward on engineering, logistics and oil flow. Petralon instead widened its aperture to governance and partnership, projecting a message that commercial performance and social license are inseparable.
Operator’s Playbook
The Dawes Island Field was discovered by Chevron 46 years ago, but like many marginal discoveries in the Niger Delta, it never progressed to development. Bureaucratic bottlenecks, uncertain economics and community relations challenges kept the site idle. Today it is producing under the operatorship of Petralon 54, which took over the asset three years ago and rehabilitated infrastructure, including the dormant DI-2 well, until it flowed crude again in June 2025. The revival of a long-abandoned field would normally be the story. Instead, Petralon 54 shifted the spotlight to its host communities. At Ogeyi’s Place Hotel in Port Harcourt, where the inauguration ceremonies were held over two days, senior officials from NUPRC, the Rivers State Ministry of Local Government and Chieftaincy Affairs, traditional rulers, community leaders and stakeholders gathered around a concept that has often eluded the Niger Delta: shared ownership of development outcomes. Petralon 54’s Executive Director, Udiakobong Equere, cast the event as a turning point, telling attendees that the establishment of the trusts “represents a bold and commendable shift in how community development is approached in the Nigerian oil and gas sector.” “It institutionalises a model where host communities, settlers and regulators collaborate transparently to define priorities and allocate resources,” he said. The PIA mandates operators, referred to as “settlors”, to fund and support the trust structure, but community representatives hold the steering wheel. That shift in control is a departure from traditional corporate social responsibility (CSR) programmes that companies typically define and execute themselves. For Ahonsi Unuigbe, Petralon 54’s founder and chief executive officer, the trust inauguration was more than regulatory compliance. It was the realisation of an ethos. “We wrote it down 11 years ago when I founded the business,” Unuigbe said. “Sustainable partnerships are a core principle. CSR is not a box-ticking activity, it’s how we operate.”
Petralon 54 is not a major producer, at least not yet. It holds a 6.06% stake in Prime Oil & Gas Coöperatief U.A., which in turn owns positions in three of Nigeria’s most prolific deepwater fields, Agbami, Akpo, and Egina, operated by multinationals Chevron and TotalEnergies. Through that stake, Petralon 54’s net production stands at 3,300 barrels of oil equivalent per day. The Dawes Island field, however, is its first operated asset. Originally discovered by Chevron 46 years ago, Dawes Island had never been brought into meaningful production. Petralon 54 assumed operatorship in 2022, inherited rusted infrastructure, battled regulatory setbacks, and frequently negotiated with host communities in Okrika Local Government Area, Ogoloma, Koniju, and Okochiri.
By inaugurating the Host Community Development Trusts (HCDTs) now, Petralon 54 is betting on the proposition embedded in the PIA, that stable returns for investors require shared prosperity for communities. “In the Niger Delta, development had too often been transactional,” said Oyeyemi Oke, Petralon 54’s company secretary, during a legal briefing at the inauguration. “PIA institutionalises something different, governance, transparency, measurable impact. It transforms communities from negotiators into stakeholders.”
From agitation to governance
Historically, oil companies in Nigeria relied on volatility management, paying off aggrieved groups, responding to grievances only when production was threatened, or negotiating memoranda of understanding that dissolved under political strain. The result was an environment where both investment and development were episodic. Petralon 54’s approach attempts to make the economics predictable for everyone. Under the new trusts, Ogoloma and Koniama communities elect trustees, who then appoint a management committee, which in turn selects project advisors and fund managers. All expenses and withdrawals are audited and disclosed to the community and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The commission’s Chief Executive, Gbenga Komolafe, represented at the event by Deputy Director Ogechi Opete , highlighted the change: “This is a structural shift from ad-hoc promises to enforceable community governance.” According to NUPRC data cited at the ceremony, 207 applications have been received nationwide for trust incorporation, with 154 receiving regulatory approval and 136 fully registered with Nigeria’s Corporate Affairs Commission. As of October, the cumulative balance of Host Community Trust funds across the country had reached N373 billion (approximately US$244 million), supporting more than 500 development projects. For regulators, the framework is meant to link community benefits not to political influence or activism, but to oil production itself. The PIA also contains a penalty clause: any vandalism or interference by community members automatically triggers a deduction from the trust’s allocated development funds. “If pipelines are sabotaged, the trust loses money, not the company,” Opete told attendees.
Trustees in the spotlight
At the Ogoloma ceremony, trustees filed to the front of the ballroom. Some were traditional chiefs, others engineers or public administrators. Dr. Taimunopekerebia Ama Miebaka (JP), an educator and long-time community influencer, was sworn in as chairman of the Ogoloma Host Community Development Trust. The Koniama Trust inauguration the next day installed Chief Dr. Chris Biriowu as chairman. Their mandate places them at the center of a governance experiment: communities must transition from protest politics to administrative accountability. “We urge you to view this as a call to duty,” said Patrick Ndukwe, permanent secretary at Rivers State’s Ministry of Chieftaincy and Community Affairs. “Your people expect fairness, integrity, and results.” In what felt more like a shareholder briefing than a traditional inauguration, NUPRC’s Engr. Olatokunbo Karimu spent part of his address walking trustees through the operational mechanics, four mandatory bank accounts (collections, project, administrative, reserve) and the separation of powers between trustees, management committees, and fund managers. “Do not usurp roles,” he warned. “Board of Trustees approves. Management Committees execute.” For residents of Ogoloma and Koniama, areas scarred by decades of industrial neglect, the bureaucratic language carried an unfamiliar but welcome tone: permanence.
Beyond statutory compliance
The ceremony was not purely administrative. Petralon 54 executives left the hotel ballroom to travel to the renovated palace of the Amanyanabo of the Ancient Ogoloma Kingdom, King Emmanuel Tamunoigbeindebia Ibiagolika Obudibo, where the company had recently funded restoration work as part of its social investment commitments. Unuigbe nodded to the symbolism. Standing before the monarch’s restored palace, he described the renovation as “a token of respect for the institutions that held these communities together long before any oil field existed.” Petralon 54’s social initiatives began before revenues ever flowed. Its “Future Leaders Programme” sponsors university education for students from oil-producing communities, ensuring that development extends beyond infrastructure into human capital. A year and a half ago, 10 students began receiving full sponsorship, before the Dawes Island field generated a naira of revenue. “It sends a message that promises are not contingent on profit,” said Dr. Kenneth Uzor, the company’s CSR and community relations manager.
Trust equals asset security
The Niger Delta’s history casts long shadows. Shutdowns, sabotage, piracy, militant agitation, operators have watched billions of dollars of infrastructure destroyed by unrest. Some multinationals, including Shell, are trying to divest from onshore assets entirely. Against that backdrop, Petralon 54 presents itself as an example of what local ownership, smaller company agility, and steady community diplomacy can achieve.
Equere, phrased it bluntly in his opening remarks: “The trust belongs to the people. And when ownership is shared, conflict becomes unnecessary.” This is the logic the PIA attempts to standardize. Under the trust model, communities are economically connected to uninterrupted production. If oil stops flowing, development funds stop too. A pipeline becomes not a target, but an asset. That incentive alignment is already changing dynamics, according to community leaders. “Before, we were outsiders,” said one attendee from Koniama who asked not to be named because discussions with chiefs are ongoing. “Now we are stakeholders. If production increases, our children will see the benefit.”
Small field with symbolic weight
Technically, Dawes Island is modest. But its story is emblematic of a broader shift in Nigeria’s oil sector, from multinationals to indigenous operators, from legacy contracts to community-linked governance.
Petralon 54 inherited a stranded asset and negotiated the delicate politics of local ownership to get it operational. Engineers spent months repairing flowlines and refurbishing hardware abandoned decades earlier. The completion of the DI-2 well and the commencement of extended well testing marked the company’s first operated production. “When we started DI-2,” Unuigbe said, “we weren’t just drilling a well. We were proving that Nigerians could revive an abandoned asset through partnership, not conflict.”
While Dawes Island is small relative to deepwater giants like Egina and Akpo, it marks a symbolic pivot. Even officials at NUPRC see it as a test case: if Petralon 54’s model succeeds, other indigenous operators may embrace community-first development as a productivity strategy rather than a compliance burden.
PIA’s unintended beneficiary
Nigeria has lost billions in potential investment over the past decade. The PIA was designed, in part, to reverse that decline. Globally, investors are skeptical of jurisdictions where community-related disruptions routinely halt production. The trust structure gives financiers something the Niger Delta has lacked — predictability. With the trust accounts insulated from company financials, and with trustees controlling capital deployment for community projects, the act reduces the risk that community relations become a financial liability.
Model to emulate
Nigeria’s oil regulators have been looking for a success story to point to since the PIA came into effect. In Port Harcourt, during the trust inauguration, officials quietly began suggesting that Petralon 54 could become that case study. Karimu, the NUPRC host community development head, closed his keynote with a challenge to the trustees: “If you do this right, you will write the next chapter of how oil and communities coexist in Nigeria.” Back in the ballroom, as the trustees signed their oaths, the atmosphere felt less like a ceremony than the start of a bet, that formal governance can succeed where handshake agreements and agitation once dominated. By sunset, the certificates had been issued, prayers said, photographs taken. Outside, Dawes Island continued to flow.
