How and what is required to start Oil and Gas business or company in Nigeria could differ from starting other type of business like Cement business, mining, agriculture etc. Companies that provide goods and services in Oil and Gas industry in Nigeria are called OIL and GAS companies and they use permits called “Oil and Gas Industry Service Permits (OGISP)” to carry out their operations.
In this post requirements for Oil & Gas Operation/ Business in Nigeria, we gave detail of steps and permits requirements for Oil & Gas business operation in Nigerian Upstream, Midstream, and the Downstream sectors.
Read: Business as a Foreign Company in Nigeria
Prio to 2021 PIA, the Nigerian oil and gas industry was regulated by Department of Petroleum Resources (DPR). After the Petroleum Industry Act (PIA) 2021 was signed into law in 2021, the Nigerian oil and gas industry was divided into three sectors but regulated by two government bodies. The Petroleum Industry Act (PIA) 2021 divided the Oil and Gas industry activities into three segments: Upstream, Midstream, and the Downstream activities.
Read how Aziza Nigeria can support you to obtain the licenses/ permits with other oil and gas compliances in Nigeria. Aziza Nigeria is well experienced consultant firm in Nigerian oil and gas sector.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) regulate and manage Upstream oil and gas activities. While Midstream and Downstream activities are managed and regulates by from Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The difference between NMDPRA permits and NUPRC permits
Both NMDPRA and NUPRC issues Oil and Gas Industry Service Permits (OGISP) and other related licenses and permits in the Nigerian Oil and Gas Industry.
Many have asked, what is the difference between the OGISP from Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) permits and that of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) permits?
Keys:
The Upstream activities are made up business of oil and gas exploration and production.
The Midstream activities are made up business of transportation and storage of oil and gas.
While the Downstream activities are made up business of refining and marketing oil and gas products.
To set up a business to provide goods or services in the Nigerian oil and gas industry, you could follow the following steps.
Read: NCDMB (NOJIC JQS) Certificate Requirements
Prio to 2021 PIA, the Nigerian oil and gas industry was regulated by Department of Petroleum Resources (DPR). After the Petroleum Industry Act (PIA) 2021 was signed into law in 2021, the Nigerian oil and gas industry was divided into three sectors but regulated by two government bodies. The Petroleum Industry Act (PIA) 2021 divided the Oil and Gas industry activities into three segments: Upstream, Midstream, and the Downstream activities.
Read how Aziza Nigeria can support you to obtain the licenses/ permits with other oil and gas compliances in Nigeria. Aziza Nigeria is well experienced consultant firm in Nigerian oil and gas sector.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) regulate and manage Upstream oil and gas activities. While Midstream and Downstream activities are managed and regulates by from Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The difference between NMDPRA permits and NUPRC permits
Both NMDPRA and NUPRC issues Oil and Gas Industry Service Permits (OGISP) and other related licenses and permits in the Nigerian Oil and Gas Industry.
Many have asked, what is the difference between the OGISP from Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) permits and that of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) permits?
Keys:
The Upstream activities are made up business of oil and gas exploration and production.
The Midstream activities are made up business of transportation and storage of oil and gas.
While the Downstream activities are made up business of refining and marketing oil and gas products.
Read: Company/ Business Registration Service
Permits Required for Oil & Gas Operation In Nigeria
So, for companies who wants to operate in Nigeria Oil & Gas industry need to determine which of the industry’s sector she wants to operate.
It’s important to state here that a company is allowed to operate in all the sectors, Upstream, Midstream, and the Downstream.
Requirements to obtain NUPRC or NMDPRA Permit(s)
There are some compliances a company need comply/ obtain before applying any of the sectors permits, whether, NUPRC permit(s) or NMDPRA Permit(s).
Steps to go:
You will start with Company Registration / Formation of Company
Registration of business/ company or Incorporate of company in Nigeria is solely done by Corporate Affairs Commission (CAC). It takes a minimum of 4 – 14 days to complete.
The minimum share capital is one (1) million share capitals for Nigerian nationals while one hundred (100) million share capitals for foreign companies.
Besides, it is advisable to increase your share capital so as to accommodate major oil and gas and marine activities categories in the industry. You may need a lawyer/ law firm in some of these.
Step 2: Register to obtainTax Identification Number (TIN) & Tax Clearance Certificate (TCC).
Step 3: Register to obtain Nigeria Social Insurance Trust Fund (NSITF)
NSITF is one of the key requirements to obtain your company’s Oil and Gas Industry Service Permits (OGISP).
Note: The above requirements are in general scenario, there are many other requirements that may apply depending on the nature of your services/ products.
Step 4: Obtain Your Oil & Gas NUPRC Permit(s) or NMDPRA Permit(s).
For companies that delivers goods and services at the Nigerian Offshore platforms will require to obtain “Offshore Safety Permit” for their staff.
Read: NipeX Registration as a New Vendor
There are three categories of OGISP permits you can use to operate in Nigerian Oil and Gas industry. These are “General Category”, Major Category” and “Special Category” DPR Permits.
Step 5: Comply with Nigerian Content Act generally known as Local Content.
There are more to explain in the Local Content policy and I will advise you read a summary article we wrote on this. The compliance you must have/ obtain to prove that you have met the local content law is called NCDMB certificate or NOGIC JQS certificate.
Step 6: Set up an office, Technology and kick off your operation.
Office size does not matter but location is very important. As a beginner, office location may be better located at Port Harcourt or Lagos State. Nigerian Oil & Gas Free Zone could be another good place to rent office for your Oil & Gas business in Nigeria.
Additional advantage:
Register with Nigerian Petroleum Exchange (NipeX)
NipeX is an arm of National Petroleum Investment Management Services (NAPIMS) is the online meeting place for purchasers (IOC, NOC) and suppliers (you).
NipeX registration is one-off registration that will enable you to do business with almost all the major oil and gas companies in Nigeria.
I must note here that you cannot be a good player in Nigerian Oil and Gas industry without registering with NipeX. All major contracts and Jobs are carried out in NipeX bidding platform. Contracts below N25 million can be won and executed by company without going through NipeX platform or registration.
AZIZA Nigeria No. 1 Oil & Gas business support body in Nigeria. We help you in all the steps listed above and advice you more on how to run a profitable Oil and Gas business in Nigeria.
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