NUPRC to probe SEEPCO-Anambra Dispute

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has disclosed that 172 Host Communities Development Trusts (HCDTs) have been established and registered by oil and gas operators across the country under the Petroleum Industry Act (PIA).

The regulator described the development as a major step towards promoting inclusive development and stability in petroleum-producing communities.

The Commission also announced plans to investigate the lingering dispute between Sterling Oil Exploration and Energy Production Company (SEEPCO) and its host communities in Anambra State, amid allegations of environmental degradation, social neglect and non-compliance with provisions of the PIA.

Chief Executive of NUPRC, Mrs. Oritsemeyiwa Eyesan, who addressed the leadership of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in Abuja said the Commission had put in place regulations and procedures to streamline the establishment and operation of the trusts, while ensuring that petroleum companies meet their financial obligations to host communities.

Under the PIA, oil and gas operators are required to contribute three per cent of their operating expenditure (OPEX) for the preceding financial year to the Host Communities Development Trust established for the benefit of their host communities.

“We have laid out procedures for doing things and we have put regulations in place to streamline the process. So far, we have registered 172 HCDTs and we have been able to manage contributions by settlors,” Eyesan said.

She explained that the Commission was not only registering the trusts but was also tracking contributions by settlors to ensure that the funds were made available for the development of the communities for which they were established.

According to her, the HCDT framework has begun producing tangible results in several oil-producing communities, with funds deployed to the construction of schools, hospitals, clinics and other infrastructure.

Eyesan said the investments had contributed significantly to peace and stability in communities that had previously experienced persistent conflicts and unrest associated with petroleum operations.

She added that the improvement in community relations had also contributed to increased oil production by creating a more stable operating environment for petroleum companies.

However, she acknowledged that implementation of the HCDT framework had not been without challenges.

According to the NUPRC boss, some of the trusts are currently embroiled in litigation arising from disagreements over the constitution and appointment of members of their Boards of Trustees.

She said the Commission had been working to resolve such disputes and ensure that the trusts continued to function in the interest of the communities and the wider Nigerian economy.

Eyesan disclosed that the Commission’s Alternative Dispute Resolution Centre had played an important role in resolving some of the grievances, providing a mechanism for settling disputes without allowing them to undermine the operations of the trusts.

Meanwhile, Eyesan also promised that the NUPRC would investigate the prolonged disagreement between SEEPCO and its host communities in Anambra State.

The dispute principally involves Ogwu-Ikpele and Ogwu-Aniocha communities in Ogbaru Local Government Area, where residents have raised concerns over alleged environmental degradation, inadequate social development and alleged failure by the oil company to comply fully with its obligations under the PIA.

The intervention by the upstream regulator comes amid growing demands by host communities for greater accountability from oil companies operating in their areas and effective implementation of the development obligations established by the PIA.

Eyesan said the Commission would look into the issues surrounding the dispute and take appropriate steps based on its findings.

Eyesan stated that the role of NUPRC now transcends regulating petroleum production towards managing the relationship between operators and communities affected by oil and gas activities.

Meanwhile, the Chairman of RMAFC, Dr. Mohammed Bello Shehu, has stressed the strategic importance of the upstream petroleum industry to Nigeria’s fiscal position, noting that oil and gas revenues constitute a significant component of inflows into the Federation Account.

He called for closer cooperation between RMAFC and NUPRC to strengthen the management of petroleum revenues and improve the benefits accruing to the Nigerian federation.

“Stronger collaboration will serve the nation better,” Shehu said.

Eyesan, however, clarified the respective responsibilities of the two agencies regarding host community funds.

While acknowledging RMAFC’s interest in the development and funding of host communities, she stressed that oversight of the management and utilization of HCDT funds remains exclusively within the regulatory mandate of the NUPRC.

The development highlights the delicate balance between management of funds in the petroleum industry and external pressure from revenue agencies in the country, especially at times of urgent need to fund political campaigns for the January 2027 elections.

Whereas the NUPRC is seeking to use the framework to transform host community relations from a longstanding source of conflict into a mechanism for sustainable development, improved security and more stable petroleum production, the RMAFC appears to be pushing to reign all available cash into government’s fiscal custody.