Higher Revenue Allocations To Oil Communities Have Helped Reduce Attacks On Oil Facilities — NUPRC
The Nigerian Upstream and Downstream Regulatory Commission (NUPRC) has stated that increased federal allocations to oil-producing communities in Nigeria have led to a reduction in the rate of bombings of oil facilities within the country.
The Commission disclosed this development in a statement issued on X (formerly Twitter) while commemorating World Environment Day in 2026.
According to the statement, this initiative was part of the Federal Government’s efforts to foster an environment conducive to oil exploration.
“Did you know that as part of efforts to ensure an environment-friendly regime and optimize Nigeria’s resources, gas terms and gas utilization strategies are now mandatory components of every Field Development Plan (FDP)?
“Furthermore, thanks to the Host Community Development Trust, oil producing communities are receiving a larger share of the national revenue, thereby reducing the frequency of attacks on oil facilities and mitigating oil spills.
“In summary, protecting the environment while promoting sustainable value creation from Nigeria’s Petroleum Resources for shared prosperity remains our key focus,” the NUPRC noted.
Billions of Naira are disbursed monthly through the Federation Account Allocation Committee (FAAC) [a committee responsible for distributing federally collected revenue among the federal, state, and local governments in Nigeria].
Allocations for oil-producing communities in Nigeria are primarily structured through two systems: the 13% Derivation Fund, which is allocated to state governments, and the Host Communities Development Trusts (HCDTs), which receive 3% of oil companies’ actual annual operating expenditures under the Petroleum Industry Act (PIA) [a landmark Nigerian legislation that aims to reform the oil and gas sector].
Oil-producing communities such as Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers benefit from these funds.
However, host communities have frequently expressed grievances against state governors, demanding that a dedicated percentage of this 13% derivation fund be remitted directly to the grassroots for local development.
Now, under the Petroleum Industry Act (PIA), a new direct funding mechanism has been introduced to directly benefit the communities hosting oil operations. This mechanism provides 3% of the actual annual operating expenditure (OPEX) [operational expenses] of upstream petroleum companies operating in the area.
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In a short video shared by the Commission, Engr. Jennis Anyanwu, the NUPRC’s Deputy Director, Gas Utilisation, stated that over the past 35 years, routine gas flaring has decreased drastically from over 80% to 7% today.
This update coincides with Nigeria’s continued pursuit of an environmentally friendly crude oil production regime.
He further noted that, in furtherance of Nigeria’s oil and gas Nationally Determined Contribution (NDC) [commitments made by countries to reduce their greenhouse gas emissions] Climate Commitments and the provisions of the Guidelines for the management of methane and greenhouse gases in the upstream oil and gas sector, the NUPRC issued a new directive earlier this year to operators to institutionalise credible Measurement, Reporting and Verification (MRV) [a framework for tracking and reporting emissions] practices for methane and Greenhouse Gas (GHG) emission inventories.
