NUPRC Approves 19 Managers for Host Communities’ Funds

*Begins deployment of technology for optimal performance

Emmanuel Addeh in Abuja

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has made public a list of 19 fund managers to oversee the administration of the monies accruing to the Host Communities Development Trust (HCDT) in line with the Petroleum Industry Act (PIA).
Out of a total of 37 applications by fund managers that had been received so far by the commission, the NUPRC disclosed that 19 had been approved while a number of others were still under review.

Some of the companies already given a nod by the upstream commission include: Chapel Hill Denham Securities, Afrinvest Asset Management, FBN Quest, FCMB Asset, Leadway, Sigma, Meristem, Vetiva, Arm Holdings, Coronation, among others.

A number of those still undergoing review, included: Access Bank, UBA Group, United Capital, Cowry Asset, Stanbic and 10 others.
Speaking at a stakeholders’ engagement  on the deployment of ‘Host Comply’ technological solutions, Assistant Director, Host Communities Department, NUPRC, Olatokunbo Karimu, stated that the move was to ensure the sustainability of the scheme even after the exit of the oil companies.

The Industry Digital Automated Portal (IDAP) for monitoring and reporting of the Host Community Development Trust (HCDT), he added, was to ensure transparent administration of the host communities’ fund.
Section 240 (2) of the PIA stipulates that each settlor (oil companies), where applicable through the operator, shall make an annual contribution to the applicable host communities development trust fund.

The amount is the three per cent of their actual annual operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities for which the HCDT was established.

“The source of funding is the three per cent Operating Expenses (OPEX) donations, gifts and grants, profits and interest from the 20 per cent of the 3 per cent. We need to focus on sustainable projects, projects that are strong on Environment, Social and Governance (ESG) backbone, such that further down the line, we can bring in global agencies to start supporting our communities.

“We have a total of 113 submissions. We’ve issued approval to incorporate for 84 and we have a total of 61, fully incorporated by the Corporate Affairs Commission (CAC),” he stated.
 Shell Petroleum Development Company (SPDC), he said, has a total of 23 fully incorporated HCDTs, even as Agip followed with 13 and Newcross Petroleum had seven.

In addition, Total and ExxonMobil had three and two approved HCDTs respectively while Seplat had three also, specifically in Akugbe, Ekugbe and Ohaji South.
 “More fund managers are going to be approved and on-boarded. A lot of these things are not fully automated yet, which brings us back to why we are here. How do we collate everything and put it in one basket where we can see and make it easy for everybody to access. That’s the reason for this meeting,” he said.
Karimu added: “The fund managers are very important because this is a long-term sustainability programme for the host communities after the cessation of oil and gas operations.”

He stated that chapter three of the Petroleum Industry Act (PIA) 2021 was fully dedicated to host communities’ development, adding that the regulation of the NUPRC on this came out in June 2022, and was being operationalised gradually.

Another representative of the commission and Acting Director, Environment, Ejiro Ufondu, who described the event as an important stakeholders meeting, said the commission has now created digital solutions for managing the host-communities development trust.
She stated that it was critical to hold the meeting after enquiries from oil companies as to how the portal deployed in managing the process would work.