Memorandum
of Understanding (MOU)
A Memorandum of Understanding was executed in 1986 between
the Government and its Joint Venture Partners on Incentive
for Encouraging Investments in Exploration and Development
Activities and Enhancing Crude Oil Export. The existing
Memorandum of Understanding has undergone periodic reviews
and negotiations are on for a further review.
The
Gas Sub-Sector
New incentives were introduced between
1990 - 1993 by the Federal Government to encourage further
investment in the gas sub-sector. The incentives include
a guaranteed minimum price for gas, a more generous royalty
rate of 5-7 per cent, a liberal capital allowance rate,
and a reduction of Petroleum Profit Tax for gas to 65.75
per cent.
Other
incentives for the sector include the Associated Gas Framework
Agreement, AGFA, of 1992 which guarantees capital investments
for gas facilities as part of oil field development and
petroleum profit tax, PPT, at 40 per cent. Indigenous
and foreign investors with companies incorporated in Nigeria
are allowed to own 100 per cent of natural gas and petrochemical
plants with a tax exemption for five years.
Investment
Opportunities
Exploration and exploitation opportunities. Concessions
are available for investors interested in Joint Venture
with APEL Exploration and Production Company Limited.
Seismic data acquisition, processing and geo-technical
engineering. As drilling increase, sea bottom surveys
and core companies will also thrive in the state.
Refinery
and Petrochemical Plants. Investors in APEL Refinery and
Petrochemical Company Limited with minimum capacity of
100,000 - 150,000 barrels per day will be guaranteed
supply of crude and necessary feedstock.
Oilfield service companies like drilling rigs, logging,
etc are viable investment areas.
Gaspowered
Industries. APEL Gas Company Limited will be promoting
several gas utilisation projects. Government guarantees
the supply of gas at reasonable rate.
Marginal fields in Akwa Ibom State. Small-scale investors
can partner with the government and indigenes of Akwa
Ibom State to exploit several small fields.
Conceptual designs, local fabrications, etc.
Large-scale
offshore funding of ring-fenced and bankable projects.
Provision of venture capital resources.
Technological
transfer programmes. There are opportunities to set up
specialised institutes or centres for capacity building
in the oil and gas sector. For instance, the Petroleum
Training Institute at Warri can be benchmarked.
