Introduction
Longstanding Nigerian oil and gas policy dating from the award of oil and gas blocs to indigenous companies in the early 1990s specified in the letters of award that an awardee could not farm out more than a 40% equity interest in the asset to a foreign-owned company. This led to the general regulatory practice that a foreign-owned company could have an economic interest higher than 40% in a licence or lease, but not a higher equity interest. An additional layer of indigenous preference policy was added by Section 3 of the Oil and Gas Industry Content Development Act 2010, which provides that Nigerian independent operators will be given first consideration in the award of, among other things, oil blocs and oilfield licences. The act also defines a Nigerian company as one that has no more than 49% foreign ownership. These indigenous preference policies will not be affected by the passage of the Petroleum Industry Bill.
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Vanguard News
Nigeria gets first composite cylinder plant
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By Prince Okafor
From an undesirable position of importing LPG (cooking gas) cylinders, Nigeria is on course to become the world’s largest manufacturer of composite cylinders with the groundbreaking of Rungas ALFA plant performed on Friday by the Minister of State for Petroleum Resources, Chief Timipre Sylva, at Alaro City, Free Trade Zone, Epe, Lagos State.
The facility alongside its sister plant – Rungas Prime in Polaku, Bayelsa State, are being developed with equity investments by the Nigerian Content Development and Monitoring Board (NCDMB) and will on completion have a combined capacity of over 1.2 million cylinders per annum, surpassing the record held by a European firm that produces 900 cylinders.
The introduction of technology in the nation’s oil and gas industry will enhance transparency and accountability, writes Jackson Onyukwu
The Department of Petroleum Resources (DPR), is the statutory regulatory agency for petroleum in Nigeria. Oil is the main foreign exchange earner for the nation. Therefore oil is the fiscal breath of Nigeria.
This explains why all eyes are on crude oil. Government officials are watching. Nigerians can’t stop talking crude and its value chain. This places a huge burden on DPR. It must be alert and alive to its duties otherwise the nation loses. From its journey in 1971 functioning with different names under different ministries through 1988 when it was renamed DPR and given full autonomy to regulate the petroleum industry till late 2019, DPR has discharged its responsibility to the best of its ability. But question marks still persisted on its ability and courage to stop the haemorrhage in both the upstream and downstream sectors of the industr
The existing rates of 10% for deep offshore and 7.5% for frontier basins are unchanged.
Crude oil by price: 0% for an oil price of below US$ 50 per barrel, 5% at an oil price of US$ 100 per barrel and 10% for above US$ 150, with linear interpolation between these markers. These rates are for 2020 and are to be increased by 2% each year. No royalty is payable in frontier acreage.
Grandfathering or voluntary conversion of existing licences:
Last year also saw proposed changes to Nigerian content requirements. The Nigerian Content Development and Enforcement Bill (Bill) proposed to repeal and replace the Nigerian Oil and Gas Industry Content Development Act 2010. Important changes in the draft Bill we saw included the end of charging of the content development levy, with the Board to instead receive funding from the Government (however the power and solid mineral industries will face content levies). However, this Bill has not yet become law.