…threatens to revoke their licenses
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has ordered oil and gas companies operating in the Niger Delta region to quickly remit the annual 3% Statutory payment to host communities at the latest end of September or have their assets licenses revoked.
This was contained in a press release signed by it’s management, Friday, 1st September and sighted by our correspondent.
The statement noted that the companies are acting I breach of the extant laws guiding their operations in the region and advised them to fulfill their obligations without further delay in the interest of peace and national development.
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.”
Quoting the relevant statute backing the operating relationship and it’s implications, it stated:
“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.”
NUPRC noted with regrets it’s efforts at addressing the issue and the lackluster attitude of the operators.
“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 been 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.”
The statement further warned the operators to do the needful and escape the sledge hammer of the law:
“The relevant section states that “Unless as otherwise provided for in this Act, failure by any holder of a licence or lease governed by this Act to comply with its obligations under this Chapter, after having been informed of such failure in writing by the Commission or Authority as the case may be, may be grounds for revocation of the applicable licence.”
“Therefore defaulting operators (settlors) under PIA 2021 (section 235) are advised to do the needful by fulfilling their obligations and remitting the outstanding arrears without further delay as the Commission might be compelled by emerging circumstances to fully apply the law.
“Notice is hereby served that in a situation where defaults are not remedied by the end of September 2023, the Commission would have no option but to revoke the licence of the defaulting settler/operator.”