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

The development comes as the regulator steps up enforcement of the PIA requirement for oil and gas companies, referred to as settlors, to contribute three per cent of their operating expenditure from the preceding financial year to the Host Communities Development Trusts.

NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed this during a meeting with the leadership of the Revenue Mobilisation Allocation and Fiscal Commission in Abuja, where she led the commission’s management team.

The meeting centred on developments in Nigeria’s upstream petroleum sector and the implementation of key provisions of the Petroleum Industry Act, particularly those concerning host communities and the obligations of oil and gas companies.

The disclosure was contained in a statement issued on Sunday by the NUPRC’s Head of Media and Corporate Communications, Eniola Akinkuotu.

The statement read, “The Nigerian Upstream Petroleum Regulatory Commission says 172 Host Communities Development Trusts have been incorporated by oil and gas companies (settlors) so far.”

Recall that in early August, the Revenue Mobilisation Allocation and Fiscal Commission directed the NUPRC to dissolve a disputed Host Community Development Trust within 48 hours, citing concerns over its constitution and the representation of affected oil-producing communities.

The directive followed an investigative hearing into the operations of Sterling Oil Exploration and Energy Production Company and the implementation of the Host Community Development Trust provisions of the Petroleum Industry Act.

Clarifying the issue, Eyesan said the commission had established procedures and regulations to ensure that the trusts were properly constituted and that settlors met their financial obligations.

“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,” the NUPRC boss stated.

The PIA Act, which came into force in 2021, introduced the Host Communities Development Trust as part of efforts to give oil-producing communities a direct stake in petroleum operations and promote sustainable development in areas hosting oil and gas facilities.

Under the law, settlors are required to establish and incorporate a Host Communities Development Trust and make annual contributions equivalent to three per cent of their operating expenditure in the preceding financial year.

The funds are meant to finance projects and programmes aimed at improving the social and economic well-being of host communities, while fostering peaceful relations between the communities and petroleum companies.

Eyesan said the Host Communities Development Trusts had commenced funding critical infrastructure projects in several communities, including schools and hospitals.

She noted that the projects had helped improve relations between oil-producing communities and petroleum operators, reducing tensions that had previously disrupted petroleum operations. According to her, the improved peace and stability had also contributed to increased crude oil production.

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

She said the commission was working to resolve the disputes and ensure that the trusts operated effectively in the national interest.

Eyesan also highlighted the NUPRC’s Alternative Dispute Resolution Centre as a key mechanism for addressing grievances arising from the implementation of the host communities provisions of the PIA.