We’ll shut down oil production over 3% PIA fund, host communities say

Oil communities in Bayelsa state have warned that oil production across the state may be halted if 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 convened in a statement jointly signed by a foremost youth leader, Christopher Tuduo, Theophilus Moses, chairman Dodo River Rural Development Authority, Francis Amamogiran, Target Segibo of Oporoma Rural Development Authority and former chairman of Koluama Clan Oil and Gas Committee, Ebimielayefa Dick- Ogbeyan.

They criticized NUPRC’s intention, outlined in a letter dated 9th October, 2023, and signed by 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.

He argued that this 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.”

The 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 stressed further that by insisting 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.
community to avoid a severe backlash. He noted that host communities are often excluded from the decision-making process, which results in the use of public resources to defend decisions in newspapers.