The Nigerian Upstream Petroleum Regulatory Commission has threatened to revoke the licences of oil and gas operators over failure to remit the statutory three per cent to host communities in the Niger Delta region by the end of September 2023.
The management of NUPRC said this in a statement issued on Saturday and made available to The Nextedition.
The management faulted the continued delay by operators to remit the statutory fees as contained in section 235 of the Petroleum Industry Act, 2021.
The statement read: “The attention of management of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has been drawn to the agitation by host communities in the oil and gas producing areas of the Niger Delta region over the delay by industry settlors/operators in remitting the statutory fees governed by Section 235 of the Petroleum Industry Act (PIA), 2021.
“Clearly, the Commission understands and shares in the sentiments and particularly the patience of the host communities on this issue, especially as the PIA had suspended the Global Memorandum of Understanding (GMOU) and the Memorandum of Understanding (MOU), replacing both provisions with a new Host Community Development Trust Fund.
“The Commission is fully aware of the implications of this development if allowed to fester. The agitation might frustrate the Commission’s efforts at up-scaling the drive for higher foreign exchange and attracting Foreign Direct Investment (FDI) into the country. Incidentally and quite unfortunately, it is also capable of truncating efforts at stabilizing the value of the Naira and attaining the much-desired rebound in our national economy and improving our macro-economic status.
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“The statutory provision of the PIA regarding the annual contribution of operators in the industry, under Section 240 (2) of the PIA, 2021, is very clear; and it states:
“Each settlor, where applicable through the operator, shall make an annual contribution to the applicable host communities development trust fund of an amount equal to 3% of its actual annual operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities for which the applicable host communities development trust fund was established.”
“It must be stated that given the implications of allowing continued default on sustained peaceful operations and the eventual effect on national oil and gas output, the Commission will be minded to activate its regulatory powers, in line with the provisions of the Act as stated above, to bring defaulting and recalcitrant settlors into compliance.
“Recently, the Commission passed the Host Community Regulation and organized a mass sensitization programme, emphasizing the responsibility of settlors in host communities under the PIA, 2021. Unfortunately, this has neglected by those concerned, thereby stoking avoidable agitations. The settlors are therefore required to perform their obligation, to commence remittance of the statutory 3% contribution.
