NUPRC warns operators on 3% remittance default to oil communities

 

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has threatened to revoke the licenses of oil operators who failed to remit the three percent statutory fees to oil communities before September ending.

The NUPRC management on Friday said its attention had 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 operators in remitting the statutory fees.

A statement signed by the Commission’s Chief Executive, Mr Gbenga Komolafe, said the three percent remittance was governed by Section 235 of the Petroleum Industry Act (PIA), 2021.

The relevant section states that failure by any holder of a license to comply with its obligations under the chapter may be grounds for revocation of the applicable license.

“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 under section 235 of PIA 2021.

“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 license of the defaulting settler/operator,” the statement said.

The commission said it understood the sentiments of the host communities, especially as the PIA had suspended and replaced existing provisions with a new Host Community Development Trust Fund (HCDTF).

The old provisions are; Global Memorandum of Understanding (GMOU) and the Memorandum of Understanding (MOU).

The Commission said it was fully aware of the implications of the development if allowed to fester, adding that 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.

“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.

“It states that each settlor, where applicable through the operator, shall make an annual contribution to the applicable host communities’ development trust fund. It should be an amount equal to three per cent of its actual annual operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities for which the applicable HCDT fund was established.