PIA

Question 1

When PIA was signed into law

Answer 1

August 16, 2021, after over 20 years of industry effort

Question 2

PIA mandate for PC

Answer 2

1. incorporation of a LLC
2. within six months of its passage,
3. to be governed by a Board.
4. operate in a profitable and efficient manner without recourse to government funds.

Question 3

Hydrocarbon Tax (HT)

Answer 3

Tax on the profits of oil and gas companies. It is a significant increase in tax burden.

PMLs (Onshore/Shallow water) - Existing Acreages 30.0%
PMLs (Onshore/Shallow water) - New Acreages 15.0%
Deepwater terrain and gas and NAG condensate 0.0%

Question 4

Royalty

Answer 4

Payment made by oil and gas companies to the government for the right to extract oil and gas from the ground.
* 10% for onshore
* 7.5% for offshore (Reduced from 12.5%)

Question 5

PIA introduces a dual tax regime consisting
of

Answer 5

• Hydrocarbon Tax (HT)
• Company Income Tax (CIT)

to be collected by the Federal Inland Revenue Services (FIRS).

Question 6

PIA introduces a dual royalty structure:

Answer 6

• Royalty based on production for all terrain
• Royalty by price where crude prices exceeds US $50/bbl

Question 7

Funds established by PIA

(5)

Answer 7

• Frontier Exploration Fund
• Midstream and Downstream Gas Infrastructure Fund
• Decommissioning and Abandonment Fund
• Host Community Development Fund 3%OPEX
• Environmental Remediation Fund

Question 8

What are the Production Based Royalties?

(5)

Answer 8

• Onshore 20.0% 15.0%
• Shallow Water 18.5% 12.5%
• Deep Offshore (> 50 kpbod) 10.0% 7.5%
• Deep Offshore (<= 50 kpbod) 0.0% 5.0%
• Frontier Basins 0.0% 7.5%

Question 9

Royalty by price (Onshore/shallow water) are

Answer 9

$0 up to $50 0.0%
At $100 5.0%
>$150 10.0%

Question 10

Royalty by price (Deep water) are

Answer 10

$0 up to $50 0%
At $100 5%
>$150 10%

credited to Nigerian Sovereign Investment
Authority (NSIA)

Question 11

Gas royalties

Answer 11

Generally 5%, except domestic at 2.5%

Onshore 5.0%
Offshore 5.0%
Domestic 2.5%
Export 5.0%

Question 12

HT does not apply to:

Answer 12

(a) Natural gas production from any upstream terrain.
(b) Condensate production from NAG fields from any upstream terrain.
(c) Plant condensate production downstream of the upstream measurement point.
(d) Crude oil produced from upstream
deepwater terrain.

Question 13

PC Ownership

Answer 13

50% MOFI; 50% MOPI

Question 14

New PC as CAMA entity will

Answer 14

• declare dividends to its shareholders,
• retain 20% of profits as retained earnings to grow
• operate on commercial basis and efficient manner without recourse to government funds
• pay its share of all payments to the government in any venture

Question 15

The board of PC ltd shall be appointed by

Answer 15

The president

Question 16

The PC Ltd BOD is made up of

Answer 16

• GCEO
• CFO
• MOFI rep. (>=director)
• MOPI rep. (>=director)
• 6 reps (non exec.) from each geopolitical zone with over 15 yrs experience in petroleum industry

Question 17

PC CEO must have

Answer 17

> =15 years extensive managerial technical and professional knowledge in petroleum