The unveiling, which was done during the issuance of Petroleum Prospecting Licence for the 2020 marginal field bid round held in Abuja, will attract dividends of the PIA to the host communities.
The PIA which was signed into law last year by President Muhammadu Buhari has opened up many opportunities for investors in the area of gas.
Section 235 of the PIA provides for the incorporation of Host Communities Development Trust by the Settlors (the oil and gas companies) for the benefit of the host communities.
The Act placed the responsibility to set up the HCDT and appoint the Board of Trustees (BoTs) on the companies in consultation with the host communities.
Similarly, Section 247 of the Act requires the BoT to set up a management committee to handle the general administration of the fund.
The HCDT provided by the PIA proposes to advance and propagate educational development for the benefit of members of the host communities within the scope of funds available to the BoTs for such purposes.
Speaking at the event, the Chief Executive, Nigeria Upstream Petroleum Regulatory Commission, Gbenga Komolafe said the unveiling of the template was imperative as the Commission is committed to transparency in its processes.
He said, “It is equally significant that the Commission will today unveil the Template and Procedure Guide for the Host Communities Development Trust for commencement of implementation of the provisions of Section 235 of the PIA, 2021 for attraction of the dividends of the Act to the host communities.
“The Commission is committed to transparency in its processes. Therefore, we have implemented Beneficial Ownership reporting, which requires full disclosure of ownership information.
“The objective is to ensure financial transparency, accountability, and public financial management among others. It would interest you to note that the Nigerian Oil and Gas Asset Beneficial Ownership Register portal has been developed by NUPRC ICT and will continue to be utilized to ensure requisite compliance by oil and gas companies.”
On the issuance of the Petroleum Prospecting Licence to the successful awardees in the 2020 Marginal Field Bid Round, he recalled that one of the major tasks inherited by the Commission, upon its inauguration last year, was the need to conclude the 2020 Marginal Field Bid Round exercise.
A breakdown of the allocation of the fields to indigenous operators showed that two fields were awarded in 1999, 24 in 2003/2004, one each in 2006 and 2007, and two in 2010.
Ten years after, in 2020, 57 fields were put up for bidding.
He added that the 2020 Marginal Field Bid Round exercise in respect of which PPLs are being issued has attracted Government revenue of about N200bn and $7m respectively.
Komolafe also stated that the passage of the Petroleum Industry Act has brought an end to the era of Marginal Field awards.
Section 94(9) of the Act states that “No new Marginal Field shall be declared under this Act”. Accordingly, the Minister shall now award PPL on undeveloped fields following an open, fair, transparent, competitive, and non-discriminatory bidding process in line with Sections 73 and 74 of the Act.
While congratulating the new Licensees, the NUPRC Boss urged them to hit the ground running in developing their awarded assets in line with industry best practices.
He said, “We shall continue to provide a predictable and enabling regulatory environment to operators in line with our technical and commercial statutory mandates with a view to optimizing the development and exploitation of the nation’s hydrocarbon resources.
“It is worthy of note that the average price of crude oil in recent months has been above $100 per barrel. This upward swing in market fundamentals is largely associated with the Russian-Ukraine conflict.
“However, the impact of the upswing in the crude oil price is not reflecting in the nation’s revenue earnings due to disruptions in our national oil production owing to sabotage, theft, and other operational challenges.”
He urged potential Licensees to take advantage of the current market realities and quickly bring their fields to production.