Tensions are rising in oil-producing areas of Delta State as host communities under Oil Mining Lease (OML) 26 warn of a potential operational shutdown over what they describe as a significant shortfall in statutory payments tied to the Host Community Development Trust (HCDT).
The communities, represented by the Isoko Grassroots Mobilisers, have called on the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to intervene, urging operators of the asset to comply fully with provisions of the Petroleum Industry Act (PIA) regarding host community funding.
At the centre of the dispute is the mandatory allocation of three per cent of annual Operating Expenditure (OPEX) by operators to fund development projects in host communities through the HCDT structure.
Dispute Over ₦2.4 Billion Shortfall and Regulatory Stalemate
According to a statement signed by coordinators Erere Okpako and Angela Akpofa, the communities accused the Asset Management Team and Sterling Global Oil Exploration and Energy Company, working alongside NNPC Exploration and Production Limited (NEPL), of failing to meet their full financial obligations.
They stated that a remittance made in October 2025 fell short by approximately ₦2.4 billion, nearly two years after the HCDT structure was inaugurated. The Board of Trustees of the trust reportedly flagged the discrepancy in November 2025, but the issue remained unresolved despite subsequent engagements.
A virtual meeting held on December 22, 2025, between stakeholders ended without resolution, although the operator had indicated it would respond within two weeks.
The matter was escalated to the Nigerian Upstream Petroleum Regulatory Commission in January 2026, leading to a tripartite meeting held on April 15, 2026, in Abuja. The session involved NEPL, the Asset Management Team, Sterling Global Oil, and representatives of the HCDT Board.
During the meeting, the operator reportedly stated that the disputed funds had been deployed toward Special Intervention Projects. However, community representatives rejected this explanation, arguing that such expenditures fall outside the provisions of the PIA and earlier Global Memorandum of Understanding frameworks.
The regulator directed NEPL to submit detailed documentation of the claimed projects within two weeks, but no immediate resolution was reached.
The Isoko Grassroots Mobilisers also raised concerns over what they described as the introduction of “adjusted OPEX” calculations for the 2023 to 2025 period, a concept they insist is not recognised under the PIA.
They argued that this approach effectively reduces the funds available to the HCDT, limiting its capacity to execute development projects in affected communities.
The group maintained that since the inauguration of the HCDT Board on February 13, 2024, no tangible development projects have been delivered within OML 26, attributing the situation to funding constraints.
Community representatives said prolonged underdevelopment has heightened frustration among residents, many of whom continue to lack basic infrastructure such as electricity and other social amenities despite hosting oil operations.
They referenced earlier security engagements, including a meeting convened on April 9, 2026, by Isoko North Local Government Chairman, Hon. Godwin Ogorugba, involving security agencies, NEPL, and community leaders, aimed at preventing disruptions to oil installations. However, the talks reportedly failed to resolve underlying tensions.
Shutdown Threat Looms as Communities Demand Immediate Compliance
The communities warned that failure to address the outstanding payments could trigger coordinated action, including possible blockades of oil infrastructure within the OML 26 corridor.
They stressed that while they are aware of the broader implications of such disruptions, continued delays in meeting statutory obligations have left them with limited options.
Calling for urgent intervention, the Nigerian Upstream Petroleum Regulatory Commission and other relevant authorities to ensure that all outstanding payments are settled in line with the Petroleum Industry Act.
They further noted that sustained non compliance risks undermining the objectives of the PIA, which was designed to balance industry operations with host community development and social stability.
The dispute adds to ongoing challenges in Nigeria’s upstream sector, where the implementation of host community provisions remains a critical test of regulatory effectiveness and industry accountability.