Snapshot: Nigeria's President Signs Executive Orders on Oil and Gas Reforms.
In a bid to boost productivity in the Nigeria's oil and gas sector, the President has issued an executive order aimed at fostering investment, streamlining processes, and promoting local content.
Fiscal Incentives for Non-associated gas, midstream and deepwater development
Gas tax credits for qualified NAG (non-associated gas) greenfield developments.
25% gas utilization investment allowance for qualifying expenditure on plant and equipment in the midstream sector.
Implementation of commercial enablers to incentivize investments in deepwater projects.
Streamlining of Contracting Process, Procedures and Timelines
Raised contract approval thresholds (minimum of $10 million) for Production Sharing Contracts (PSCs) and Joint Operating Agreements (JOAs).
Simplified contract approval process in collaboration with industry stakeholders.
Increased duration period for third-party contracts to 5 years, with an option for renewal, aiming to compress the contracting cycle to 4-6 months.
Local Content Reform
Flexibility in the application of the Nigerian Oil and Gas Industry Content Development Act, 2010 (Local Content Act) to address practical challenges of indigenous capacity and encourage investments without compromising cost competitiveness.
The enforceability of these orders may be subject to debate, especially in instances where they conflict with existing laws. We anticipate the publication of additional details in the federal gazette, which will provide clarity regarding the comprehensive scope of application upon which we will then provide a thorough breakdown.
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