We’ll shut down oil production over 3% PIA fund – Host communities warn NUPRC

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Oil communities in Bayelsa State have warned that oil production across the state may be truncated if the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) fail to refrain from actions that could potentially reduce or create bottlenecks for the three per cent host community fund under the Petroleum Industry Act (PIA).

This was revealed on Friday in a statement jointly signed by a foremost youth leader, Mr Christopher Tuduo, His Royal Highness, Theophilus Moses, Chairman of the Dodo River Rural Development Authority, Francis Amamogiran, Target Segibo of Oporoma Rural Development Authority and former Chairman of Koluama Clan Oil and Gas Committee, Engr Ebimielayefa Dick- Ogbeyan.

The communities criticized NUPRC’s intention, outlined in a letter dated 9th October 2023, and signed by Capt. John R. Tonlagha for the Commission Chief Executive, which proposed participation in various activities related to the host community fund, such as BOT nominations, selection and inauguration, Management Committee Advisory Committee nomination and selection and facilitation of NEEDS assessment.

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They argued that all the activities outlined would be too much for the three per cent to fund.

The group maintained that while NUPRC’s oversight function is essential, over-involvement in the activities of the HCDTs is counterproductive and financially burdensome.

“They are getting into the operations arena and this will not augur well for the industry because each participation by the NUPRC will be funded from the HCDT trust.”

They also criticized the mandate for HCDTs to hire lawyers and accountants with a minimum of 10 years’ experience, stating that it would be impossible to pay such professionals from the five per cent administrative fund, which comes from the three per cent.

They argued, “In reality, no NGO organizations, including those like Accord or the Nigerian Conservation Foundation, which is one of the most successful NGOs in Nigeria, employ full-time lawyers, let alone one with 10 years experience. The HCDTs are styled as NGO organizations and should be expected to act according to the best practices and standards of that sector.”

The statement insisted that NUPRC must stop overstepping its boundaries, avoid acting as operators and cease deducting expenses from the three per cent in cunning ways. The group supports transparency and accountability but the HostComply portal being developed by NUPRC to manage the administration of the fund should not be funded from the three per cent, the statement said.

It stated that the regulator should bear the financial burden for the application, which enables it to monitor the activities of different players more effectively.

Additionally, the group accused the regulator of insensitivity to the host communities’ concerns, particularly the allocation in the PIA and the criminalization of oil and gas asset destruction against communities lacking surveillance contracts.

They questioned the timing of NUPRC’s review of host community regulations, suggesting that the focus should be on setting up HCDTs and prioritizing benefits to the community.

The communities, in the statement, issued a firm warning, declaring their readiness to take decisive action and escalate their efforts to address the concerns of the oil and gas communities if the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) fails to treat the matter as an emergency.

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