The federal government has gazetted the Petroleum Industry Act, 2021, thereby providing a legal framework for the petroleum industry.
The act will provide a legal, governance, and fiscal framework for the Nigerian petroleum industry.
It will also provide a legal framework for the development of host communities, and for related matters with a commencement date starting on 16 August 2021.
According to the gazette, the host communities’ development trust for the benefit of the host communities for which a settlor is responsible must be incorporated within the next 12 months.
The act said that a host communities’ development trust shall be incorporated within 12 months from the effective date for existing oil mining leases, Punch reports.
It said, “The host communities’ development trust shall be incorporated within 12 months from the effective date for existing oil mining leases; within 12 months from the effective date for existing designated facilities.”
The trust will be funded by an annual contribution of 3 per cent of a company’s actual annual operating expenses of its preceding financial year in the upstream petroleum operations affecting the host communities.
