172 Host Communities Trusts Incorporated Under PIA – NUPRC

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has disclosed that 172 Host Communities Development Trusts (HCDTs) have been incorporated by oil and gas companies operating across Nigeria.

The NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed this while addressing the leadership of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in Abuja.

Eyesan said the Commission had continued to enforce the provisions of the Petroleum Industry Act (PIA), particularly those relating to host communities and the obligations of oil and gas companies operating in the country.

Under the PIA, oil and gas companies, known as settlors, are required to contribute three per cent of their operating expenditure from the preceding financial year to a Host Communities Trust Fund for the development and benefit of their host communities.

According to Eyesan, the NUPRC has established regulations and procedures to streamline the incorporation and management of the trusts.

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

She explained that the trusts had financed the construction of schools, hospitals and other community infrastructure, while also helping to promote peace and stability in communities that had previously experienced conflicts.

Eyesan noted that the improved stability had contributed to increased oil production in some areas.

She, however, disclosed that some HCDTs were facing litigation over disagreements concerning the composition of their Boards of Trustees.

The NUPRC boss said the Commission was working to resolve the disputes and ensure that the trusts operate effectively, adding that its Alternative Dispute Resolution Centre had played an important role in addressing some of the grievances.

She also clarified that while the RMAFC’s interest in host communities was appreciated, oversight of the management of HCDT funds remained under the exclusive responsibility of the NUPRC.

Eyesan further pledged to investigate the lingering dispute between Sterling Oil Exploration and Energy Production Company (SEEPCO) and its host community in Anambra State.

Responding, the RMAFC Chairman, Dr Mohammed Bello Shehu, commended the NUPRC for implementing reforms in the upstream oil and gas sector, which he said had contributed to growth in oil production.

Shehu said the Commission considered the upstream oil and gas sector crucial to the Nigerian economy because of its significant contribution to revenue accruing to the Federation Account.

He thanked the NUPRC leadership for honouring the commission’s invitation and called for stronger collaboration between both institutions in the interest of the country.