|
◊
◊
|
A new Nigerian Midstream and Downstream Petroleum Regulatory Authority is established for the midstream and downstream sectors .
A Revised and reduced Ministerial role . The Minister of Petroleum retains general supervision over petroleum operations but his existing powers to grant and revoke licences and to approve licence assignments require recommendations from the Commission .
|
◊ |
available to the Commission ( and published by the Commission on its website ) within 1 year . This is stated to apply to existing contracts – but is not one of the express mandatory provisions that applies to un-converted pre-PIA OPLs / OMLs and so it is unclear if they fall within this requirement .
All new PPLs and PMLs must be granted through a fair , transparent , competitive bidding process .
|
◊
NNPC overhaul . NNPC to be replaced by NNPC Limited ( a new limited liability company ) within 6 months from PIA enactment . NNPC Limited is to operate on a commercial basis without government funding and must publish annual reports and audited accounts . Government owns all shares in NNPC Limited and controls the selection of its management team
• New types of licences / leases :
◊
◊
◊
Petroleum Exploration Licences , Petroleum Prospecting Licences and Petroleum Mining Leases are the new forms , with the PIA specifying mandatory terms for these licences ( but remaining largely the same as with the prior licence forms , including a 20 year term for PMLs , and allowing for production sharing contracts , or concessions that joint venture with NNPC Limited ).
Model forms of the PEL , PPL and PML are to be developed by the Commission ( but are not currently available ).
Marginal fields to receive their own separate form of licence . This helps to close a longstanding lacuna about their legal status , and the potential consequences from a termination / expiry of their establishing OML .
Fiscal terms :
• Tax :
◊
◊
The existing Petroleum Profits Tax is replaced by hydrocarbon tax , along with the application of Companies Income Tax ( previously exempt ).
Hydrocarbon tax applies to crude oil , condensates and natural gas liquids produced from associated gas . It does not apply to associated and nonassociated natural gas , nor frontier acreage .
◊ Hydrocarbon tax rates :
◊
• �New acreage granted post-PIA : onshore and shallow water 15 % ( and for all OMLs / OPLs with PSCs converted into PPLs ).
• �Converted acreage ( see below ): onshore and shallow water 30 %.
• �No rate specified for deep offshore .
• �These rates are reduced from those contained in earlier drafts of the PIB and are lower than the prior Petroleum Profit Tax rates ( even with CIT now applying ).
The Commission will set fiscal oil prices on an “ export parity ” basis , which is used for taxation calculation purposes .
• New joint venture arrangements :
◊ If a PEL , PPL and PML is granted on a “ concession ” basis , then NNPC Limited has the right to a carried interest participation of up to 60 %. NNPC Limited must refund its share of development and production costs in cash or from future production .
◊
There is a cost tax deductibility threshold of 65 % of gross revenue ( but excess can be carried forward ). Head office costs are not tax deductible .
◊
◊
The PIA specifies some model principles for establishing incorporated joint venture companies with NNPC Limited – but this structure operates on a voluntary basis and cannot be imposed on upstream participants .
All contracts , licences and leases with NNPC are to be non-confidential and should be made
bracewell . com