NUPRC Discloses 172 Host Community Trusts Incorporated by Oil Firms

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

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

The Host Communities Development Trust is established under the Petroleum Industry Act (PIA) to facilitate the development of communities hosting petroleum operations.

Under the Act, oil and gas companies, known as settlors, are required to contribute 3% of their operating expenditure (OPEX) from the preceding financial year to the Host Communities Trust Fund.

Eyesan said the NUPRC has established procedures and regulations to guide the incorporation and operations of the trusts while overseeing contributions from oil companies.

“We have laid out procedures for doing things and we have put regulations in place to streamline the process. So far, we have registered 172 HCDTs and we have been able to manage contributions by settlors,” she said.

According to the NUPRC, the HCDTs have funded the construction of schools, hospitals and other infrastructure in host communities.

The commission said these interventions have contributed to improved peace and stability in communities that were previously affected by conflicts and disputes linked to petroleum operations.

Eyesan said the improved stability had also contributed to increased oil and gas production.

NUPRC acknowledges HCDT disputes

Despite the progress recorded, the commission said some HCDTs are currently involved in litigation arising from disagreements over the constitution of their boards of trustees.

Eyesan said the NUPRC was working to address the disputes and ensure the trusts operate effectively in the interest of host communities and the wider economy.

She added that the commission’s Alternative Dispute Resolution Centre had played a key role in resolving some of the grievances.

The NUPRC boss also clarified that oversight of how HCDT funds are managed remains within the commission’s regulatory mandate.

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

RMAFC calls for stronger collaboration

The Chairman of RMAFC, Dr Mohammed Bello Shehu, commended the NUPRC for implementing reforms in the upstream petroleum sector, which he said had contributed to increased production.

Shehu said the upstream oil and gas sector remains critical to Nigeria’s fiscal position because petroleum revenues account for a significant share of funds accruing to the Federation Account.

He called for stronger collaboration between RMAFC and NUPRC to strengthen oversight and support the country’s revenue mobilisation efforts.

The development highlights the continued implementation of the host community provisions of the PIA, with HCDTs serving as a mechanism for channeling oil and gas companies’ contributions towards development in communities hosting petroleum operations.