FG approves 75 HCDTs, insists on 100% compliance by IOCs
• Unveils digital platform for 3% remittance to host communities
The Federal Government has disclosed approval of about 75 Host Community Development Trusts (HCDTs)
Speaking during a stakeholders’ workshop, Chief Executive of Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, who made the revelation, added that about 41 of the HCDTs have been incorporated while 19 others have been pre-qualified as fund managers.
Komolafe said government has commenced the process of establishing a baseline of ongoing community development projects, preparatory to migration of such into the HCDTs.
He also stressed that government would enforce 100 per cent compliance, should oil companies default in remitting to the fund.
An upshot of the Petroleum Industry Act (PIA), oil companies in the country are mandated to remit three per cent of their operating expenses to a pool that would enable government address age-long agitation on transferring benefits of the oil industry to communities impacted by exploration and production.
NUPRC also unveiled a digital platform at the event, aimed at ensuring transparency and accountability in administration and management of the fund.
Komolafe, who was represented by Executive Commissioner, Economic Regulation and Strategic Planning, NUPRC, Dr. Kelechi Ofoegbu, said the Commission prioritises efforts towards increasing oil and gas production and ensuring maximum federation revenue, through the optimisation of oil and gas value chain.
He noted that efforts have been constrained by myriads of challenges, including insecurity, low investment and de-prioritisation of funding of hydrocarbon development arising from energy transition.
He said: “To further stem the tide of sabotage and third-party interferences on oil and gas critical infrastructure, the PIA has, in effect, domesticated the protection of our oil and gas infrastructure to the host communities.
“One critical milestone under the PIA is the incorporation of HCDTs by the settlor, provided for in Section 235, as well as appointment of a Board of Trustees (BOT) by the settlor, in consultation with host communities.
“The settlors are the oil and gas companies operating within host communities. Section 240 (2) of the PIA stipulates that each settlor, where applicable, through the operator, shall make a yearly contribution to the applicable host communities’ development trust fund of an amount equal to three per cent of its actual yearly operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities, for which the applicable host community’s development trust fund was established.”