Upstream & Gas Systems

COMMUNITY RELATIONS AND HOST COMMUNITY GOVERNANCE UNDER THE PETROLEUM INDUSTRY ACT (NIGERIA)

ThemeUpstream & Gas Systems

Country / RegionNigeria

Year2026

AuthorsOpetunde Diaro

Summary

Nigeria's Petroleum Industry Act (PIA) 2021 introduced a fundamental restructuring of host community governance, replacing the ad hoc, conflict-prone framework with a statutory model built on Host Community Development Trusts (HCDTs). Five years post-enactment, implementation remains uneven, trust deficits persist, and the Act's community provisions have become both a compliance mandate and a political flashpoint. This note assesses the governance architecture, operational challenges, and emerging risks for operators and investors.

Key Messages

Nigeria’s Petroleum Industry Act (PIA) 2021 fundamentally restructured host community governance through the introduction of Host Community Development Trusts (HCDTs).
The reform replaced an informal, conflict-prone system with a statutory framework intended to improve accountability and stability in host community relations.
Five years after enactment, implementation remains inconsistent across operators and regions, limiting its intended impact.
The HCDT framework has evolved into both a regulatory compliance requirement and a growing political and operational risk factor for investors and operators.

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