Nigeria Oil and Gas Restructuring
The key objective of the Act is to restructure the Nigerian oil and gas industry. The PIA provides legal, governance, regulatory and fiscal frameworks for the Nigerian oil and gas industry, including the development of petroleum host communities. Once implemented, the extensive changes will overhaul the fiscal, administrative, and regulatory regimes of the sector’s key institutions.
The PIA repealed or will repeal several laws including:
• Associated Gas Reinjection Act
• Hydrocarbon Oil Refineries Act
• Motor Spirit (Returns) Act
• Nigerian National Petroleum Corporation (NNPC) (Projects) Act
• NNPC Act (where NNPC ceases to exist under section 54(3) of the Act)
• Petroleum Products Pricing Regulatory (Establishment) Act
• Petroleum Equalization Fund Act
• Petroleum Profit Tax Act (PPTA)
• Deep Offshore and Inland Basin Production Sharing Contract Act.
Some acts are immediately repealed, while others are triggered by events. Several provisions remain in effect until the termination or expiration of existing oil prospecting licenses and oil mining leases. Analysis show that the PIA could lower industry costs by significantly reducing several taxes, fees, and levies.
Under the PIA, the Nigerian National Petroleum Corporation (NNPC), the national oil company, will transition into an incorporated limited liability company as “NNPC Limited.” This commercial entity will replace the NNPC as currently structured. The PIA includes provisions for the transfer of assets, interests, liabilities, and employees as the entity reorganizes.
Opportunities exist under the PIA for technical assistance of the development of regulatory capacity and framework based on the PIA. U.S. companies can provide for effective data gathering, capture, analysis, and price framework for domestic gas utilization.
The identified gaps in legal and regulatory technical assistance, are an opportunity to mitigate impact during the transition period.
In addition, opportunities for technical joint venture assistance for development of production infrastructure including gas processing plants, terminals, liquefied petroleum gas (LPG) plants, and LPG cylinder manufacture plants, and mini-liquefied natural gas (LNG) plants.
Consultancy for mapping, capping, and decommissioning of old oil wells provides avenues to employ U.S. expertise.
U.S. Commercial Service, Nigeria is engaging government agencies and monitoring industry developments for the implementation of the PIA. U.S. companies interested in accessing these opportunities are encouraged to contact the U.S. Commercial Service Nigeria for guidance. For more information, please contact CS Nigeria at: Benedicta.Nkwoh@trade.gov.