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ARTICLE · 30 AUGUST 2022

Unbundling The PIA: Host Communities Development

The host community development provisions in the Petroleum Industry Act 2021 (PIA) remain a focal topic of discourse amongst stakeholders in the Nigerian oil and gas industry.

NigeriaFinance and Banking

INTRODUCTION

The host community development provisions in the Petroleum Industry Act 2021 (PIA) remain a focal topic of discourse amongst stakeholders in the Nigerian oil and gas industry. The reason for this is not farfetched as prior to the PIA, there were no laws imposing community development obligations on oil and gas companies.1

Prior to the enactment of the PIA, although not statutorily required to do so, oil and gas companies addressed the development of host communities through the instrumentality of Global Memorandum of Understanding (GMOU), Offshore Memorandum of Understanding (OMOU) and other means of collaboration with host communities. The GMOUs and OMOUs were typically entered into between the oil and gas company, the host communities (represented by appointed representatives) and the relevant state government. By the GMOUs and OMOUs, the companies inter alia will undertake to either provide or fund certain developmental activities and projects for

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