The House of Representatives has resolved to investigate the alleged failure of oil companies to remit three per cent of their annual operating expenditures to the Host Communities Development Trust Fund as required by law.
This followed the adoption of a motion by Rep. Hart Godwin at plenary on Wednesday in Abuja.
Godwin recalled that the Petroleum Industry Act enacted in 2021, established a framework for the governance, regulation, and fiscal management of Nigeria’s petroleum sector, including provisions for the development of host communities.
Citing Section 235 (1) of the Act, he explained that every licensee or lessee operating within a host community is required to incorporate an HCDTF for the benefit of the community. Section 236 further mandates that such incorporation must be completed within 12 months of the effective date for existing oil leases.
He added that Section 240 (2) of the PIA stipulates that each operator must contribute an amount equal to three per cent of its annual operating expenditure from the previous year to the applicable trust fund.
“Some oil companies have violated these provisions by failing to establish or fund the HCDTF within the stipulated time,” Godwin said. “This neglect has hampered development in oil-producing communities and undermined the objectives of the PIA.”
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He reminded the House that Section 297 (1) of the Act makes such breaches punishable through administrative penalties, while Section 238 provides for license revocation in cases of continuous non-compliance.
The House consequently mandated its Committee on Host Communities to investigate the alleged violations and report back within four weeks for further legislative action.
In a related motion, the House also resolved to probe the alleged non-reporting and non-remittance of Equity Liquefied Natural Gas revenues by the NNPC Limited.
Rep. Nnamdi Ezechi (PDP–Delta), who sponsored the motion, noted that Nigeria LNG Limited was incorporated in 1989 as a joint venture between NNPC Limited, Shell, TotalEnergies, and Eni, with NNPC holding a 49 per cent equity stake.
He revealed that NNPC LNG Limited, incorporated in 2012 in the Cayman Islands to manage LNG sales for the group, has allegedly failed to transparently report its financial transactions and operations.
“This lack of disclosure has resulted in potential non-remittance of dividends, taxes, and statutory payments due to the Federal Government,” Ezechi said.
He further alleged that certain deductions from LNG sales proceeds, including those from Equity LNG, were made without federal approval or disclosure, raising concerns about possible financial misconduct and loss of national revenue.
The House directed its Committee on Gas Resources to investigate the operations, financial reporting, and remittance practices of NNPC LNG Limited regarding NLNG proceeds and to report its findings within four weeks.
