More Nigerians To Benefit As NUPRC Expands Host Communities Development Trust Funds To 72

…We Have Restored Investor Confidence In Oil & Gas Sector—Komolafe


The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said it has set up 72 Host Community Host Communities Development Trusts (HCDT) which is one of the game-changer targeted at restoring investors’ confidence in Nigeria’s multi-billion dollars oil and gas sector.

The Chief Executive Officer of the Commission, Gbenga Komolafe stated this on Monday in a monitored interview on Arise TV.

Earlier this year, Komolafe had said at the Petroleum Club Quarterly Dinner that the commission approved 60 HCDT.

The NUPRC boss said the commission has recorded numerous achievements within 18 months and believes the breakthroughs will create an investment rush in the country’s oil and gas sector by foreign investors.

The Nigerian oil and gas sector was opened to numerous opportunities after the signing of the Petroleum Industry Act, 2021.


The NUPRC was established consequent to the passage of the PIA with the statutory responsibility of ensuring compliance to petroleum laws, regulations and guidelines in the Upstream Oil and Gas Sector.

Komolafe revealed that so far, 18 regulations have been drafted by the regulator out of which five have been gazetted.

He said, “Upon being appointed into the office, myself and the team hit the ground running. We had clear line of sight on the navigational path to drive the regulatory activities of the Nigerian upstream sector.

“I am proud to say that within then, we have recorded a basket of achievements and the first key achievement we can point to and I can be fact-checked on the basis of the positive feedback that I have received is the fact that we have being able to restore confidence into the industry and we know that confidence is very key to attracting investment.

“So, we have been able to restore confidence in the minds of investors and I am able to say that we have been able to do this via the processes that we have adopted in terms of the regulatory tools that we have put in place.


“As part of our achievements, within a record time of 18 months, we have been able to develop 18 key regulations and five of these regulations we are happy to say is fully gazetted while the rest 13 are being reviewed by the ministry of justice. We are optimistic that those 18 will be gazetted within the shortest possible time so that the implementation of those regulation can commence in earnest.

“Aside that, we have, within the record time of 18 months been able to ensure the conversion of 40 Oil Prospecting Licence (OPLs) and Oil Mining Lease (OMLs) to Petroleum Prospecting Licence (PPLS) and Petroleum Mining Lease (PMLs).

“Asides that, we have been able to within 18 months incorporate 72 Host Community Development Trust and the beauty of that is that we will be able to inculcate sense of ownership into the host communities by the time the host community development trust begins to implement developmental projects within those host communities. That itself will engender peace in the host communities. We know that creating conducive environment for operators to thrive itself will help in achieving our core objective- which is to increase the oil and gas production in Nigeria.”

The NUPRC CEO said the operations of the upstream sector in Nigeria is now guided by law, adding that the era of operating by discretion has been buried by the PIA.

Komolafe revealed that several regulations put in place by the NUPRC would accelerate Nigeria’s target to decarbonise by 2060 in line with Cop 26 agreement entered by the Nigerian government.

Importantly for the NUPRC boss is the commission’s effort to curb leakages and ensure transparency in hydrocarbon accounting in Africa’s biggest economy.


He said, “Asides that, we have been able to bring clarity in our operations and the issues of operating by discretion has been done with.

“We now operate with clarity and our decision is fully guided by law. Besides that, we have equally been able to automate our processes in a manner to ensure operational efficiency.

“On assumption, we developed key regulations to guide our regulatory activities in the manner that has enabled the commission to be focused on its activities and has helped in the achievements we have recorded within the shortest possible time.

“The first in the objective we have outlined for ourselves is to ensure that transparency in hydrocarbon accounting as a key objective, and the reason for that is that we are able to curb leakages. Asides that, we equally have a key objective to enhance the national oil and gas production which is a key objective drawn from the statutory mandate of the commission.

“The other objective that we are equally pursuing is to ensure that we are equally reduce the unit cost of production of oil per barrel believing that once we are able to achieve that, we will be able to optimise the revenue for the federation from the nation’s hydrocarbon resources.

On host communities, he revealed that the NUPRC has engaged Original Equipment Manufacturer (OEM) to set up a digital platform that will ensure transparency in the implementation of the Host Community Development Trust.

He believes that with a transparent implementation, the communities would embrace the oil and gas companies and oil assets situated in their communities.

Komolafe explained, “Section 235 of the PIA provides for the implementation of the Host Community Development Trust under the PIA and we are proud to say that within a record time of 18 months, we have been able to incorporate 72 host community development trusts.

“Aside this, we have been able to collaborate with Original Equipment Manufacturer, OEM, to put in place a digital automated platform that will ensure transparent implementation of this host community in a manner that both the settler, the host community and the public at large can transparently monitor the implementation of this thing.”

With the enactment of PIA, settlors are required to set up a Host Community Development Trust for the benefit of their respective host communities and contribute 2.5% of the operating expenses of their previous financial year to the Trust’s fund.

The costs of disruption of petroleum operations attributable to actions of the host community are deductible from the settlor’s contribution to the Trust’s fund. It is expected that all voluntary host community development initiatives will now be managed under the HCDTs.


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