Introduction

The Nigerian economy is significantly influenced by the oil and gas industry. Although this sector contributes less than 10% to the country's gross domestic product, it plays a vital role by contributing approximately 90% of foreign exchange earnings and 60% of total income. Consequently, any negative changes in the industry can have a profound and lasting impact on government finances. This is why successive administrations have maintained a strong focus on the sector, despite ongoing discussions about diversifying the economy.

The Petroleum Industry Act (PIA) introduces substantial modifications to the legal and governance framework, administrative procedures, regulatory and fiscal terms, as well as engagements with host communities within the oil and gas industry in Nigeria. These changes are anticipated to bring about a transformation in the country's oil and gas sector by addressing various challenges, including the encouragement of investments, heightened emphasis on midstream operations, enhanced funding for Joint Venture (JV) operations, environmental remediation and abandonment, and the transfer of effective control to host communities in terms of project selection, execution, and ownership.

In essence, the PIA aims to establish a legal, governance, regulatory, and fiscal framework for the Nigerian Petroleum Industry and the development of host communities. It comprises five chapters, 319 sections, and eight schedules covering diverse aspects such as Rights of Preemption, Incorporated Joint Ventures, Domestic Base Price and Pricing Framework, Pricing Formula for Gas Price for Gas-Based Industries, Capital Allowances, Production Allowances and Cost Price Ratio Limit, Petroleum Fees, Rents and Royalty, and the creation of the Ministry of Petroleum Incorporated.

This course provides a comprehensive understanding of the legal and fiscal framework of Nigeria's fiscal system following the implementation of the PIA 2021. The training program is designed to be highly practical, incorporating hands-on interactive sessions that will enable participants to grasp the practical implications of the PIA.

Highlights and Objectives

This training course will highlight:

Ø  The Fundamental Types of Upstream Petroleum Contracts

Ø  The Advantages and Disadvantages of the Different Types of Upstream Petroleum Contracts and How it is suitable for Specific Types of Projects

Ø  Concessions, Production Sharing & Risk Service Contract, Important Details and Suitability for any Oil and Gas Upstream Project.

Ø  The legal and commercial framework of the new PIA 2021

Ø  The impact of PIA on project performance and project profitability

Ø  The impact of the new PIA on both the government and contractor take under different boundary conditions of the market and the producible reserves.

Ø  The impact of the new act on the booked reserves or the reserves that can be produced economically.

Ø  The behavior of the new PIA at low prices and low production rates.

Ø  The impact of the new PIA on the economic life of the fields.

Ø  How to enhance the performance and profitability of oil and gas projects

Ø  Familiarization with the application techniques of profitability evaluation and the economics analysis in the Oil & Gas industry

Ø  Petroleum related project evaluation methods

Ø  Exploration Value Chain, Uncertainties, and Decisions

Ø  Principles of Economic Decision Analysis

Ø  Challenges of Investment Under Uncertainty

Ø  Screening of the petroleum projects based on evaluating the investment opportunities.

Ø  Identifying the risks and uncertainties of the project

Ø  Application of risk management methods in mitigating the identified risks of the project

Training Methods

This training seminar will incorporate both theory and skill training components, applying hands-on exercises, facilitation of group discussions, practical case studies, and real-life examples.

Target Audience

This training seminar is a suitable wide range of professionals but will significantly benefit:

Ø  Policy Makers

Ø  Analysts

Ø  Commercial managers

Ø  Economists

Ø  Government officials

Ø  Engineers

Ø  Business advisors

Ø  Asset managers

Ø  E&P managers

Ø  Decision Makers and Performance Monitoring Specialists

Ø  Budgeting and Financial Modelling Specialists

Ø  Accountant and Analysts

Ø  Financial Analysis Specialists

Ø  Junior Managers in Data Analyst

Ø  Planning managers

Ø  Project managers

HOW WILL THIS TRAINING COURSE BE PRESENTED?

The training course is both practical and theoretical, and is delivered using:

Ø  Interactive presentations and tutorials

Ø  Team and individual workshop exercises

Ø  Onscreen worked examples

Ø  Videos and posters

Ø  Debates and discussions

Ø  Guided self‐study and research

Ø  Quizzes

Ø  Case studies

Course Outlines:

Day 1: Introduction and Overview of Upstream Petroleum industry

• Oil and Gas Industry Structure
• Key Oil and Gas Terminology
• Relationship between Different Players in the Oil and Gas Industry
• Phases of the Upstream Industry
• Oil and Gas Contract Fundamentals and Legal Principles

Day 2: Contracting in The Upstream Sector: Ownership and Licensing

Ø  Petroleum Contracts: License-Concession Agreements, Joint Ventures, Service Contracts and Production-sharing Agreements

Ø  Key Issues in International Oil and Gas Contracts

Ø  Negotiation Framework and Strategy - Objectives of Host Countries / NOCs and IOCs

Ø  Host Government ‘s Role in Upstream (Exploration & Production (E&P)) Agreements

Day 3:  Nigeria’s 1969 Act and Petroleum Profit Tax Act (PPT)

Ø  Nigerian Modified Concessionary / JV System

Ø  Nigerian 1993 & 2000 PSC System

Ø  Deep offshore and Inland Basins Production Sharing Act

Ø  Nigerian 2005 PSC System

Ø  The Legal Framework of The Petroleum Industry Act 1969 and PPT Act.

Ø  Royalty

Ø  Education Tax

Ø  Adjusted Profit,

Ø  Assessable Profit ,

Ø  Chargeable Profit

Ø  Petroleum Profit Tax (PPT)

Ø  Investment Tax Allowances and Investment Tax Credit

Ø  Production Sharing Contracts

Day 4: The legal and fiscal framework of the Nigerian Petroleum Industry Act 2021

Ø  Exploration license

Ø  Petroleum Prospecting license (PPL)

Ø  Petroleum Mining License (PML)

Ø  Petroleum Host Community Development Fund

Ø  Royalty based on production rate

Ø  Royalty based on price inflation.

Ø  Adjusted Profit Modelling

Ø  Assessable Profit Modelling

Ø  Chargeable Profit Modelling

Ø  Cost Price Ratio

Ø  Production Allowance

Ø  Hydrocarbon Tax

Ø  Company Income Tax

Ø  Production Sharing Modelling

Day 5: Project Performance under the new PIA 2021

Ø  The behavior of the new PIA at low prices and low production rates

Ø  The Impact of Nigerian Petroleum Industry Act 2021 on Project Profitability.

Ø  The impact of the PIA2021 on the development of marginal fields

Ø  The impact of the new PIA on both the government and contractor take.

Ø  The impact of the new PIA on the economic life of the fields.

Ø  The impact of the new act on the booked reserves.

Ø  The advantage and disadvantages of the PIA 2021