Abuja: The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) stated that approximately 102 Host Community Development Trusts (HCDTs) have received N97 billion and $ 149 million as HCDT funds remitted by settlors.
Mrs Chidinma Nwabueze, Senior Manager, Health, Safety, Environment, and Community, NUPRC, disclosed this on Wednesday in Abuja at a media workshop organised by the commission.
Nwabueze stated that the commission had facilitated the remittance of N97 billion and $149 million into the HCDT’s fund account as of May 19.
The Petroleum Industry Act (PIA) requires oil exploration companies and settlors to allocate three per cent of their Operating Expenditure (OPEX) from the previous year to their host communities.
Nwabueze said that the HCDT was incorporated and funded by the settlors (Licencees) from three per cent of the OPEX of the annual expenses from the preceding year.
Currently, approximately 102 HCDTs have received more than N97 billion and $149 million as HCDT funds remitted by settlors into the HCDT fund account.
Within three years, many of the HCDTs will have completed projects.
“Last week we were in Bayelsa to commission 67 projects from Renaissance Energy Company Ltd., and in Rivers State to commission some other projects,” she said.
She said that the commission had also been able to approve 167 applications entirely issued as approval to incorporate.
“Out of these, we have 146 fully incorporated HCDTs at the Corporate Affairs Commission (CAC), while 21 are under processing.
Out of 146 fully incorporated HCDTs, we have over 102 HCDT accounts opened and funded to the tune of N97 billion and 149 million dollars,” she said.
Nwabueze stated that the HCDT completely aligned with the objective of the NUPRC by promoting the sustainable development of upstream petroleum activities in Nigeria, benefiting the host communities.
She said that it entailed direct social and economic benefits from the petroleum operations to the communities, providing a framework for establishing peace between the dwellers and the settlors.
According to her, the speedy execution of host community development regulations and the incorporation of HCDT funds are aimed at curbing rampant community restiveness and providing a conducive business environment for operations and shared prosperity to thrive.
Speaking on the timeline required to incorporate HCDT effectively, she said that it must be incorporated before the application for the Field Development Plan (FDP) and the commencement of commercial operations for a petroleum mining license.
“Three strategic stakeholders in HCDT are the regulator, charged with making regulations and providing oversight functions for implementation of developmental projects, and the settlors who give the three per cent OPEX to fund the trust.
“The third one is the Board of Trustees, being the community members, nominated by the community dwellers to serve on the board, to manage and administer the HCDT fund,” she said.
She said that, although the host communities were funded through the three per cent OPEX of the settlers, there are other sources of funding, namely donations, gifts, and grants, as well as profits, interest, and reserve funds.
“The three per cent OPEX is considered 100 per cent when it enters the collection account and is subdivided into 75 per cent for capital project development and 25 per cent for investment,” she said.
Nwabueze, however, stated that the NUPRC also developed innovative software and a one-stop shop called HostComply.
She stated that the software was designed for end-to-end reporting and monitoring of HCDT activities, enabling the effective implementation of the HostCom provisions of the PIA.