KEY POINTS
- NUPRC says 172 Host Communities Development Trusts have been incorporated under the PIA.
- Oil and gas companies are required to contribute 3% of their previous year’s operating expenditure to the trusts.
- The NUPRC says the trusts have funded schools, hospitals and other infrastructure while helping to improve peace and oil production.
The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, says 172 Host Communities Development Trusts (HCDTs) have been incorporated by oil and gas companies as part of efforts to ensure that communities hosting petroleum operations benefit directly from the industry.
The development is tied to the implementation of the Petroleum Industry Act (PIA), which introduced a formal framework for funding development projects in oil-producing communities and strengthening relations between operators and their host communities.
The NUPRC disclosed that 172 HCDTs have so far been registered by oil and gas companies, known under the PIA as settlors.
NUPRC Chief Executive Officer, Oritsemeyiwa Eyesan, made the disclosure while receiving the leadership of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in Abuja.
According to the commission, the incorporation of the trusts represents part of its efforts to enforce provisions of the PIA, particularly those dealing with host communities and the obligations of oil and gas companies operating in the country.
Under the PIA, settlors are required to contribute 3 percent of their operating expenditure from the preceding financial year to a host communities trust fund.
The funds are intended to support development initiatives that directly benefit communities affected by petroleum operations.
Trust funds supporting community projects
Eyesan said the HCDTs have already begun financing projects in several host communities, including the construction of schools, hospitals and other infrastructure.
She noted that the projects were contributing to improved relations between oil companies and their host communities while helping to promote peace and stability in areas that had previously experienced tensions and unrest.
According to her, the improved relationship between operators and communities has also contributed to increased oil production.
The NUPRC chief stressed that the commission has established procedures and regulations to ensure that the trusts are properly constituted and their financial contributions are effectively managed.
Despite the progress recorded, Eyesan acknowledged that some HCDTs have faced legal disputes, particularly disagreements surrounding the constitution and membership of their boards of trustees.
She said the NUPRC was working to resolve the issues and ensure that the trusts operate effectively in the national interest.
The commission’s alternative dispute resolution centre has also been used to address some of the grievances involving host communities and other stakeholders.
Eyesan added that the NUPRC remains responsible for overseeing the management of funds associated with the HCDTs.
She also pledged to investigate an unresolved dispute involving Sterling Oil Exploration and Energy Production Company (SEEPCO) and its host community in Anambra State.
Speaking during the meeting, RMAFC Chairman Mohammed Shehu commended the NUPRC for implementing reforms in the upstream petroleum sector, which he said had contributed to increased oil production.
Shehu described the upstream oil and gas industry as critical to Nigeria’s economy because of its significant contribution to revenue accruing to the federation account.
He called for stronger collaboration between the NUPRC and RMAFC, particularly on issues affecting the management of the country’s petroleum resources and the communities that host oil and gas operations.
The push to strengthen the HCDT framework comes as Nigeria continues efforts to improve crude oil production, reduce tensions in petroleum-producing areas and ensure that communities hosting oil and gas infrastructure receive greater economic and social benefits from the industry.
