According to an Entrepreneurng report, Oil and gas production is a significant source of wealth in Nigeria. Anyone intending to launch an oil and gas company in Nigeria must adhere to certain legal requirements. This reading will outline the steps necessary to set up an oil and gas company in Abuja, Lagos, Bayelsa, Port Harcourt, and other oil-producing states in Nigeria.
The actions listed below must be taken to create an oil and gas firm in Nigeria in 2023:
1. Business Registration
a. Typically, the first step is to register your prospective oil firm with the Corporate Affairs Commission.
All businesses, whether owned by citizens, foreigners or both, must comply with this rule. All corporations must be registered with the Committee on Corporate Affairs, and the Companies and Associated Matters are required to do so (CAC). The procedure is simple, and qualified CAC agents handle it online. This enables the business to acquire a distinct legal entity through which it can bring lawsuits and bring purchases of real estate. The registration-related paperwork that the business acquires gives it respectability and inspires customers’ trust. They are also used as the main documents for opening a bank account or requesting contracts.
b. submission of a registration form to the National Investment Promotion Commission (NIPC)
Only businesses with foreign ownership are required to do this. The National Investment Promotion Commission Act states that every firm with foreign investment or participation must register with the NIPC before starting operations in Nigeria and before being incorporated into the CAC.
c. Tax compliance and obtaining a tax clearance certificate
A business planning to work in the oil and gas sector must register with the Federal Inland Revenue Service (FIRS) and get a Tax Clearance Certificate (TCC). The Tax Clearing Certificate effectively attests to the fact that the Company’s tax affairs for the prior year were in order and free of any outstanding taxes.
d. Registration of the Nigerian Social Insurance Trust Fund (NSITF)
To take care of the demands of the employees, this program was developed. In the event of old age, infirmity, employment termination, or death, it provides financial security to private sector employees and is paid to them or their survivors. To be eligible for a license to operate in the Nigerian petroleum industry, organizations must register with NSITF, pay monthly contributions to the pension or retirement benefits, and pay for additional work-related accidents.
2. Certificates & Permits
a. Permit from the Department of Petroleum Resources
Under the supervision of the ministry of petroleum resources, this agency is charged with the job of providing regulatory guidance along the whole oil and gas value chain in Nigeria. Before any individual or company can participate in the oil and gas industry, an application must be sought and received. The DPR issues 3 sorts of licenses in the Oil and Gas Industry (OGISP) division, depending on the service the company offers. license types include general, major, and specialized categories. This license must be processed with specific paperwork and legal fees.
b. License issued by the Nigerian Content Development and Monitoring Board (NCDMB)
The NCDMB was established under the Nigerian Oil and Gas Industry Development Act of 2010. Registration is required for the Nigerian Oil and Gas Industry Content Joint Certification System, which compiles information on all significant activities in the Nigerian Oil and Gas Industry. The Board oversees the oil and gas sector to ensure that Nigerian Content standards are met, and it also focuses on initiatives to enhance domestic competence.
c. Certificate of and Registration for the Industrial Training Fund
Companies are required to pay 1% of their payroll to the ITF if they have a minimum annual revenue of N50 million or more than five employees. Bidders for contracts with the government or the private sector must also include suppliers, contractors, and consultants.
To demonstrate its contribution to the fun, which is used to facilitate and encourage the acquisition of skills in industry and commerce to create a pool of locally skilled workforce sufficient to meet the economy’s growing needs, a company planning to provide a service in the oil and gas sector must therefore obtain this credential.
3. Registration of Pensions
You can register for a pension with the assistance of the Nigerian Pension Fund Administrators (PFA). It is not required unless the business intends to register with the Nigerian Petroleum Exchange or has more than 5 workers. Therefore, it is advised that businesses enroll their staff members so they can begin saving for retirement.
4. The Nigerian Petroleum Exchange registration
Although this stage is optional, it is advised if the firm intends to use well-known platforms for contract bidding. This can go unnoticed if all the company does is minor contracts.
5. Become a member of production companies
To collaborate with the main oil producers, especially the International Oil Companies, and to acquire access to the petroleum products that will be marketed, is essential (IOC). Among the producers are Total, Shell, NNPC, and others.
Conclusion
The oil and gas market offers several business prospects, depending on one’s resources or skills. No matter what, it is recommended to register a company before taking part in any oil and gas operations in Nigeria. Additionally, once a company has been granted a license, it is necessary to obtain additional licenses from the DPR and any other pertinent regulatory organizations.
