 |
|
Wednesday,Feb 17,2010
This time around: Kenya Stockbroker collapse, Report leaks, Credit Reference Live
Mars Group Kenya: The an anti-corruption watchdog group is the wikileaks for Kenya, re-publishing hitherto top-secr....
By Bankelele
|
 |
Thursday,Feb 22,2007
Bank of Uganda announces Forex Bureaux Closures
Eight Forex Bureaux closed under new regulations UK, February 2007: In marking 40 years of banking ....
By Staff Reporter
|
|
Sunday,Nov 12,2006
African Journal of Business and Economic Research (AJBER), Vol 2&3 Nov 2006
Editorial CommentSome New Economic and Social Challenges in AfricaJohn KuadaEditor, AJBERContact email: kuada....
By John Kuada (Editor)
|
|
Tuesday,Aug 08,2006
Directory of African Businesses and Organisations in the United Kingdom
Directory of African Businesses and Organisations in the UK, 2007-2008To the best of our knowledge, the first effor....
By Adonis & Abbey Publishers
|
|
Saturday,May 20,2006
Too much hype about Nigeria’s oil
The centrality of oil to Nigeria’s economy is obvious, given the fact that it accounts for over 95% of her fo....
By Madaki O. Ameh
|
|
Monday,May 08,2006
Glo: The Making of Nigeria’s First Global Brand
This must be interesting times for Otunba Michael Adenuga and his scions that run the Michael Adenuga business empi....
By Uche Nworah
|
|
Monday,Mar 13,2006
IS GLOBALISATION CAPABLE OF RAISING LIVING STANDARD, THROUGH INTERNATIONAL TRADE IN NIGERIA?
IS GLOBALISATION CAPABLE OF RAISING LIVING STANDARD, THROUGH INTERNATIONAL TRADE IN NIGERIA? “Globalizat....
By Mahe Shehu Ahmed
|
|
Monday,Jan 09,2006
Economic and Business Research in Africa: The Role of Africa-focused Journals
Economic and Business Research in Africa: The Role of Africa-focused Journals The design and implementa....
By John Kuada
|
|
Monday,Oct 17,2005
An Upside Down look at Integrated Marketing Communications in Ghana
It would seem strange that ad agencies are still being called ad agencies today when all progressive an....
By Robert Hinson
|
|
Sunday,Oct 09,2005
The Nigerian oil and gas industry: from joint ventures to production sharing contracts
INTRODUCTION Oil and gas operations commenced in Nigeria effectively in 1956, with the first commercial find i....
By Madaki O. Ameh
|
|
|
|
The Nigerian oil and gas industry: from joint ventures to production sharing contracts
By:
Madaki O. Ameh
|
|
Madaki O. Ameh a lawyer, works for Shell Nigeria and is currently a Chevening Scholar in Energy Law and Policy at the Centre for Energy, Petroleum and Mineral law and Policy, University of Dundee, Scotland, UK
|
|
In addition to the specific contracts signed with the individual companies, the main law which regulates the operation of PSCs in Nigeria is the Deep Offshore and Inland Basin Production Sharing Contracts Act No. 9, Laws of the Federation of Nigeria, 1999. This law sets out the general framework for the operation of PSCs, including the applicable royalties, tax regimes, and the manner in which costs and profits are allocated between the parties. It provides for payment of a flat rate of 50% tax on petroleum profits by PSC operators, and sets different royalty regimes, depending on the water depth in which the operation is carried out, ranging from 12% for water depths of 200-500m, to 0% for water depths in excess of 1,000m. PSCs in inland basins attract a flat royalty of 10%.
In addition to royalties, taxes and its share of profit oil, the government also earns revenue from signature bonuses paid by the oil companies upon successful bids. Most forms of payments under PSCs operating in Nigeria are made in oil, as the law provides for cost oil, tax oil, royalty oil and profit oil. Investment Tax Credits and Allowances are also available to the investors at the rate of 50% of the value of such investments.
Some of the advantages associated with PSCs include the relative flexibility in the management of the operations, and the fact that there is no financial burden on the host government, and even after a commercial find, the payment to the contractor is in oil, which does not attract any direct financial cost. Leveraging on the technical know-how and experience of the companies in such operations, the government can focus its energies in other areas of the economy while trusting that the oil and gas industry will develop at an acceptable pace without the usual trappings of cash call constraints. However, PSCs have some drawbacks such as the risky nature of the operation. For instance, in the event of an unsuccessful operation, millions of dollars could be completely lost - unless the local laws allow for costs from one acreage to be transferred to another, which is not always the case, and would depend on the provisions of the PSC entered into by the parties. Also, the fact that the contractor is usually allowed a relatively unfettered hand to draw up and execute its programme could lead to allegations of gold plaiting of costs.
In recent times, there has been a conscious shift in the contractual structure in the oil and gas industry in Nigeria from JOAs to PSCs. The dynamics of this shift and what it portends for the future of the industry in Nigeria and the investment climate in the country is the subject of the full version of this paper to be published in the African Renaissance Journal of November/December 2005.CONTINUE ON PAGE
1
2
3
 SEND TO A FRIEND
Articles published on this website are reviewed before publication, which means there may be a delay between the time you sent your article and its appearance on the website. Holler Africa! reserves the right to edit articles for style and length.
|
|
|
|
| View Comments |
|
|
|
I'm just gonna ask a question..What is/are the impact(s) of oil and gas in the economic development of Nigeria???
|
ODUOLA SAHEED OLASUNKANMI
|
|
|
|
Anthony Mohamed Aris Mahmoud
|
|
wow so much of oil and the idea of oil rigs and oil tanks and people gotta look out from oil spills that can release CO2 to the air negatively affecting humanity
|
|
|
|
I am also trying to fix on the pramrogme a Civil Society Platform to discuss a lot of emergent issues around local content e.g. the newly launched ICT4D Plan (10 Sectors) which contains a lot of opportunities for local content development. In addition we are bringing some young innovators with local content projects for possible NITDA support. The pramrogme is being finalized this week. We can meet in the venue on Thursday evening to take advantage of synergy but if not we can organize around you on Friday. A few leading CSO ICT leaders will be on the pramrogme too.
|
|
|
|
enjoyed reading yor article it very enlightening it also shows things still function in Nigeria.
|
|
|
|
PLEASE THERE ARE SOME FOREIGN PEOPLETHAT WOULD LIKE TO GO INTO JOINT VENTURE WITH NNPC AND WOULD LIKE TO KNOW HOW THEY CAN GO ABOUT IT.
|
|
|
|
Good points all aorund. Truly appreciated.
|
|
|
|
Articles like this really grease the sthfas of knowledge.
|
|
|
|
Home run! Great sluiggng with that answer!
|
|
|
|
|
|
|
|
|
may i please know the meaning of the abbreviation JOA
|
|
|
|
This is a very enlightening piece.
|
Somieari Beals (somiearib@yahoo.com)
|
|
1. How does the JOA and PSC operate. i.e. what are their advantages and disadvantages
2. What does acreage mean in the oil and gas industry?
|
|
|
|
|
|
