Legal and Regulatory Framework of the Nigerian Oil and Gas Industry
2.1 Regulatory Agencies The key regulatory agencies are;
2.1.1 Ministry of Petroleum Resources This is the government administrative arm that deals with policy formulation and provides the general direction to other agencies in the sector for the exploration and production of both oil and gas resources. It also oversees all other sectors including downstream, midstream and oil services. The Minister of Petroleum Resources supervises the Ministry.
2.1.2 Nigeria National Petroleum Corporation (NNPC) NNPC is a statutory corporation through which the FGN participates in the oil and gas industry. The NNPC’s primary function is to oversee the regulation of the oil industry, with secondary responsibilities for upstream and downstream development. The National Petroleum Investment Management Services (NAPIMS), a subsidiary of NNPC, supervises FGN’s investments in the oil industry
2.1.3 Department of Petroleum Resources (DPR) The DPR is responsible for ensuring compliance with the terms governing the award of oil licences to companies engaged in petroleum operations. Other functions include the following:
(i) Monitors the oil companies’ operations to ensure consistency with international industry standards and practices.
(ii) Issues the annual permit (DPR Permit) to the companies, without which they would be unable to operate in the industry
2.1.4 Nigerian Investment Promotion Commission (NIPC) The NIPC is responsible for registering foreign investments in Nigeria. It also acts as a liaison between investors and government ministries, departments, institutional lenders and other institutions concerned with investments. Notable incentives in the NIPC Act include, but not limited to, the following:
(i) Enlargement of the modes of payment for foreign equity to include spare parts, raw materials and other business assets acquired without initial disburse ment of foreign exchange from Nigeria .
(ii) Guarantees foreign investors the unrestricted transferability of dividends or profits (net of tax) attributable to foreign investment in Nigeria and capital repatriation in the event of liquidation. Dividend payments are subject to withholding tax at 10% as final tax.
2.1.5 National Maritime Administration and Safety Agency (NIMASA) The Agency was established by the NIMASA Act to monitor and promote the development of indigenous and commercial shipping in international and costal shipping trade, and to regulate and promote maritime safety, security and marine labor amongst other duties.
2.1.6 Nigeria Customs Service Board (NCSB) The NCSB is charged with the responsibility for formulating general policy guidelines for Nigeria Customs Service (NCS), and for the collection of customs and excise duties in the country.
The NCSB carries out the administration of the Customs and Excise Management Act (CEMA), through the NCS.