Nigeria Drives Deep Offshore Oil Exploration With New Incentives
Nigeria is moving towards attracting investors to its prolific deep offshore drilling and gas exploration using new fiscal responsibility policy that industry analysts views as attractive.
The Federal Government has announced Value Added Tax (VAT) exemption on Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
The government has also announced the introduction of the Notice of Tax Incentives for Deep Offshore Oil & Gas Production that provides new tax reliefs for deep offshore projects.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced the unveiling of the two major fiscal incentives, saying the initiatives are aimed at revitalising Nigeria’s oil and gas sector.
The Minister said the two new fiscal incentives are Value Added Tax (VAT) Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production, which according to him, are in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
A statement issued by the Federal Ministry of Finance said, “The VAT Modification Order 2024 introduces exemptions on a range of key energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
According to the statement, “This initiative is aimed at positioning Nigeria’s deep offshore basin as a premier destination for global oil and gas investments”.
“These reforms are part of a broader series of investment-driven policy initiatives championed by His Excellency, President Bola Ahmed Tinubu.
The Federal Government has announced Value Added Tax (VAT) exemption on Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
The tax exemptions were contained in circulars titled: ‘Value Added Tax (VAT) Modification Order 2024’; and in the ‘Notice of Tax Incentives for Deep Offshore Oil & Gas Production’, which are in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
The VAT Modification Order 2024 introduces exemptions on a range of key energy products and infrastructure including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
In addition, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production provides new tax reliefs for deep offshore projects.
The Minister said the concessions were expected to attract new and massive investments into the oil and gas and to revitalise the industry.
