NUPRC Registers 172 Oil Host Community Trusts, Moves to Enforce 3% Levy

By Adedapo Adesanya

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says it has registered 172 Host Communities Development Trusts (HCDTs) established by oil and gas companies under the Petroleum Industry Act.

The development comes as the regulator intensifies enforcement of the PIA provision requiring oil and gas companies, known as settlors, to contribute three per cent of their operating expenditure in the preceding financial year to the trusts.

NUPRC Commission Chief Executive, Mrs Oritsemeyiwa Eyesan, disclosed this during a meeting with the leadership of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in Abuja.

According to a statement issued by the NUPRC Head of Media and Corporate Communications, Eniola Akinkuotu, the meeting focused on developments in the upstream petroleum sector and the implementation of provisions of the PIA, particularly those relating to host communities.

Mrs Eyesan said the commission had established procedures and regulations to ensure that the trusts were properly constituted and that oil companies fulfilled their financial obligations.

“So far, we have registered 172 HCDTs, and we have been able to manage contributions by settlors,” she said.

The PIA, which came into force in 2021, introduced the HCDT as a mechanism for giving oil-producing communities a direct stake in petroleum operations and promoting sustainable development in areas hosting oil and gas facilities.

Under the law, oil companies are required to incorporate HCDTs and make annual contributions equivalent to three per cent of their operating expenditure from the preceding financial year.

Mrs Eyesan said the trusts had already begun funding critical infrastructure, including schools and hospitals, in several host communities.

She added that the projects had improved relations between oil-producing communities and operators, reduced tensions that previously disrupted petroleum operations and contributed to increased crude oil production.

The NUPRC boss, however, acknowledged that the implementation of some trusts had been affected by disputes, particularly disagreements over the composition of boards of trustees.

She said the commission was working to resolve the disputes, while its Alternative Dispute Resolution Centre had played a pivotal role in addressing grievances between host communities and petroleum operators.

Mrs Eyesan also clarified that although RMAFC had expressed interest in the management of funds meant for host communities, regulatory oversight of the trusts remained within the mandate of the NUPRC.

She promised that the commission would investigate the lingering dispute between Sterling Oil Exploration and Energy Production Company and its host community in Anambra State.

Speaking at the meeting, RMAFC Chairman, Mr Mohammed Bello Shehu, commended the NUPRC for reforms in the upstream sector, which he said had contributed to increased oil production.

Mr Shehu said the upstream petroleum industry remained critical to RMAFC because of its significant contribution to revenues accruing to the Federation Account.

He called for stronger collaboration between both agencies to ensure that reforms in the oil sector translated into increased revenue and improved development outcomes for Nigerians.