NUPRC issues operators ultimatum to resolve host community trust issues

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has given operators of the Oil Mining Lease 42 (OML 42) two weeks ultimatum to resolve the Host Communities Development Trust (HCDT) issues.

NUPRC said if the oil operators failed to comply with its directives, they would be sanctioned in line with the Petroleum Industry Act (PIA).

Captain John Tonlagha, Executive Commissioner, Health, Safety, Environment and Communities (HSEC), NUPRC, gave the directive in Abuja at the NUPRC’s meeting with the operators and OML 42 Community Forum.

The NEPL and NECONDE Energy Ltd. are operators of the OML 42 under Joint Ventures (JV).

The News Agency of Nigeria (NAN) reports that 14 host communities including Odidi, Egwa, Kantu, Ajuju, Omamominogho and Jones Creek among others, made up the OML 42 which have four wells/assets and located in Delta State.

The PIA mandates the incorporation of host communities’ development trust by companies/settlors under the PIA which is to be done within a particular timeframe.

NAN gathered that the companies/operators had failed to engage the communities or set up Board of Trustee (BoT) members to be approved in principle by regulators and registered by the Corporate Affairs Commission (CAC) with due process.

Tonlagha explained that the worried OML 42 community forum had complained that the operators had not registered the host communities in line with the provisions of chapter three of the PIA.

He said the operators were supposed to have done the registration with the CAC but were yet to do that while other operators had submitted their HCDT for vetting.

“The communities are worried, so we had to bring everybody together to see ways to help by ensuring that the lingering issues are tackled,” he said.

He said after the registration, the communities would be able to derive the three per cent benefit of the host community development trust fund which was meant for them as part of the shareholders.

He expressed displeasure over the delay by the operators, adding that the delay and lingering issues were at the detriment of the communities.

“We have given them two weeks to incorporate the host community development trust fund and appoint the Trust’s Board of Trustee, if they failed to do that after two weeks we might be forced to sanction them,” Tonlagha said.

Meanwhile, the representatives of the host communities had expressed worry over the negligence on incorporation of the host communities development trust by the operators and lack of infrastructural development in the communities.

NAN also gathered that the host communities are proposing to have a different HCDT BoT for each of the four oil fields.

The OML 42 community forum Chairman, Windfree Atemubaghan who sued for peace said it was time the operators realised that the project was community based adding that host communities had suffered due to serious tussle between NEPL and NECONDE.

“Lack of understanding and agreement between the partners is affecting the development of our communities negatively in view of the PIA implementation.

“We appeal to the regulators to expedite action and resolve these matters because we will not want to shut the asset down because if we do so, it will not be beneficiary to our society and country,” he said.

Chief Samson Oyimi, Public Relations Officer, OML 42 community forum, said the oil wells could produce over 100,000 barrel oil per day still the communities trust were not incorporated while three per cent fund had not been implemented.

“The operators are dragging the payment to the expense of the oil communities,” he said.

Oyimi, while calling for a lasting solution, decried the fact that the operator/settlor of the OML continued to drag issues without any positive outcome to benefit the communities.

Amb. Billy Ekele, Chairman, Omamominogho Community, decried that the Federal Government has made a law to develop Niger Delta region but the companies operating in the region were not complying to the law hence the attention of the regulatory agencies were needed.

“Oil exploration continues to go on but communities’ development is poor. We are crying out to the world to come and help us,” Ekele said.

The NEPL’s representative said it had engaged its partners as a strategy for implementing the PIA, adding that the PIA implementation strategy brought out complex issues in the joint ventures.

The company said the issues it had with the NECONDE Energy Ltd. were numerous and not limited to the PIA implementation, adding that they could not be resolved ordinarily rather with serious involvement of NECONDE management.

Also speaking, the representative of NECONDE said there were some engagements prior to the PIA implementation, adding that it would like to see the process close out for peaceful oil production, communal prosperity and economic growth.

The company said the misunderstanding between the NEPL and its consultant called Amaranta that had been interfacing on its behalf with the communities prior to PIA also contributed to the delay.