Country Report

Nigeria upstream fiscal summary

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24 January 2020

Nigeria upstream fiscal summary

Report summary

Nigeria awards upstream licences to foreign investors under production sharing contracts (PSC). Nigerian PSCs are primarily governed by the 1969 Petroleum Act, 1959 Petroleum Profits Tax Act and the 1999 Deep Offshore and Inland Basin Production Sharing Contracts (DOIBPSC) Act. The main PSC parameters are cost recovery and profit sharing based on an R-factor. Royalty rates are based on water depths. In November 2019, the government amended the DOIBPSC Act, introducing an oil royalty of 10% in deep offshore fields, with an additional price sensitive element, ranging from 0% to 10. Corporate income tax for oil (known as Petroleum Profits Tax) is based on the block's location and is reduced for the first five years for new investors.

Table of contents

  • Basis
  • Licence terms
  • Government equity participation
    • Ring fencing
    • Bonuses, rentals and fees
    • Indirect taxes
    • Royalty
    • PSC cost recovery
    • Income tax
    • Petroleum profits tax
    • Education tax
    • Corporate income tax
    • PSC profit sharing
    • Fiscal treatment of decommissioning
    • Product pricing
    • Summary of modelled terms
  • Recent history of fiscal changes
  • Stability provisions
  • Split of the barrel and share of profit
  • Effective royalty rate and maximum government share
  • Progressivity
  • Fiscal deterrence

Tables and charts

This report includes 35 images and tables including:

  • Timeline
  • Timeline detail
  • Split of the barrel - oil
  • Split of the barrel - gas
  • Share of profit - oil
  • Share of profit - gas
  • Effective royalty rate - onshore, oil
  • Effective royalty rate - shelf, oil
  • Effective royalty rate - deepwater, oil
  • Effective royalty rate - onshore, gas
  • Effective royalty rate - shelf, gas
  • Effective royalty rate - deepwater, gas
  • Maximum government share - onshore, oil
  • Maximum government share - shelf, oil
  • Maximum government share - deepwater, oil
  • Maximum government share - onshore, gas
  • Maximum government share - shelf, gas
  • Maximum government share - deepwater, gas
  • State share versus Pre-Share IRR - oil
  • State share versus Pre-Share IRR - gas
  • Investor IRR versus Pre-Share IRR - oil
  • Investor IRR versus Pre-Share IRR - gas
  • Bonuses, rentals and fees
  • Indirect taxes
  • Cost recovery
  • Profit sharing - oil
  • Effective contractor profit share - oil
  • Assumed terms by location - oil
  • Assumed terms by location - gas

What's included

This report contains:

  • Document

    Nigeria upstream fiscal summary

    PDF 939.77 KB

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