The oil and gas sector has been Nigeria’s major source of income from time immemorial. The sector contributes majorly to the economy of Nigeria. In Nigeria, both Federal and State government have special interest in oil and gas. In this write-up we are going to explore the steps one need to take in order to set up an oil and gas company.
The first step in the registration of an oil and gas company in Nigeria is the registration with the Corporate Affairs Commission (CAC). The minimum authorized share capital for such registration is One Million Naira (N1,000,000). But if foreigners are the owners of the company, then the minimum share capital required by CAC for the registration of an oil and gas company is One Hundred Million Naira (N100,000,000). This would enable the foreigners to apply for the necessary permits.
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Registration with the Nigerian Investment Promotion Commission (NIPC) is required after the CAC registration where the company is foreign-owned. The NIPC Act mandates that all foreign-owned companies should register with the NIPC immediately after registration with CAC and before operation in Nigeria.
Once an oil and gas company is registered with CAC, company must obtain a Tax Identification Number (TIN), Tax Clearance Certificate (TCC), and Value Added Tax (VAT) Certificate from the Federal Inland Revenue Service (FIRS). The TIN will be used to open a corporate account with the bank while the TCC will be required when applying for permits such as DPR permit, NSITF application etc.
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The following permits and licenses are required for operation in the oil and gas sector in Nigeria:
- Nigerian Social Insurance Trust Fund (NSITF)
- Nigerian Upstream Regulatory Commission (NUPRC) Permit (formerly known as DPR Permit)
- Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) Permit.
- Nigerian Petroleum Exchange (NIPEX)
- Nigerian Content Development and Monitoring Board (NCDMB) (under this they Nogic JQS and Equipment Certification). The Nogic JQS is the basic registration and Certificate you will get as an oil and gas company and the certificate is one of the requirements in NIPEX desktop and onsite audit. The equipment certification is for oil and gas company that have equipment.
In conclusion, the oil and gas business is very lucrative and versatile, one can go into LPG supply or oil and gas equipment supply. The registration of the oil and gas company with CAC in Nigeria is simple. But you will need the services of a CAC accredited agent to navigate through the process of the registration. In order to guarantee strict adherence to the applicable laws and regulations governing the industry, it is important that any individual or corporate entity wishing to venture into oil and gas business in Nigeria and obtain the necessary licenses and permits should seek and retain the services of a professional in the oil and Gas sector.
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