Nigeria oil & gas investors to enjoy 10-year tax holiday

Nigeria’s minister of petroleum resources says with the full implementation of the Petroleum Industry Act comes the opportunity for operators in the oil and gas sector to enjoy a 10-year tax holiday. Gbenga Biobaku, Senior Partner at Gbenga Biobaku & CO joins CNBC Africa for more on the regulatory framework of the petroleum act.

Mon, 26 Sep 2022 14:14:38 GMT

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AI Generated Summary

The slow implementation of the Petroleum Industry Act has raised concerns, but the establishment of regulatory bodies and NNPC's transition to a private sector entity indicate progress.
Fiscal incentives, including a 10-year tax waiver and generous tax allowances, aim to attract investments into Nigeria's oil and gas sector, particularly in gas infrastructure.
Challenges such as gas pricing and infrastructure development pose obstacles to the sector's growth, requiring effective management and regulatory support to drive progress.

Nigeria's Minister of Petroleum Resources recently announced that the full implementation of the Petroleum Industry Act (PIA) will offer a 10-year tax holiday to operators in the oil and gas sector. While some critics believe that the implementation of the PIA has been slow, there is optimism surrounding the potential benefits it could bring. The PIA has established regulatory bodies such as the Instrument and Downstream Authority and the Upstream Regulatory Commission to oversee the sector. Additionally, the Nigerian National Petroleum Corporation (NNPC) has transitioned into a private sector organization, opening up opportunities for internal restructuring. The tax incentives provided by the PIA aim to attract investments into the sector, especially as Nigeria positions itself to supply gas to regions like Europe. With significant investment needed in infrastructure and gas commercialization, the government hopes to leverage fiscal incentives to drive growth in the industry. However, challenges such as gas pricing and infrastructure development remain key areas of focus for the sector's progress. Overall, the oil and gas sector in Nigeria holds promising prospects, but effective management and investor confidence will be crucial to capitalize on the opportunities presented by the PIA.