PETROLEUM INDUSTRY ACT, 2021 [AS AMENDED BY THE NIGERIAN TAX ACT, 2025]

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CENTER FOR LAWS OF NIGERIA: FEDERAL REGULATIONS

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THE PETROLEUM INDUSTRY ACTS, 2021

LAWS OF THE FEDERATION OF NIGERIA

[As Amended by the National Tax Act]

ARRANGEMENT OF SECTIONS

CHAPTER 1 – GOVERNANCE AND INSTITUTIONS

Part I -Vesting, objectives and application

1.     Vesting of petroleum

2.     Objectives

Part II – Minister of Petroleum

3.     Powers of the Minister

Part III – The Commission

4.     Establishment of the Nigerian Upstream Regulatory Commission

5.     Application of this part

6.     The objectives of the Commission

7.     Technical regulatory functions of the Commission

8.     Commercial regulatory functions of the Commission

9.     Functions of the Commission for frontier basins

10.    Powers of the Commission

11.    Governing board of the Commission

12.    Functions of the board of the Commission

13.    Remuneration and allowances of the board of the Commission

14.    Suspension or removal of members of the board of the Commission

15.    Resignation of a Non-Executive Commissioner

16.    Vacancy on the Board of the Commission

17.    Filling of vacancy on the board of the Commission

18.    Commission Chief Executive and Executive Commissioners

19.    Employees of the Commission

20.    Terms and conditions of service in the Commission

21.    Remuneration and allowances of employees of the Commission

22.    Statement of estimated income and expenditure of the Commission

23.    Secretary to the Commission

24.    Fund of the Commission

25.    Notice to the Commission

26.    Special Powers of the Commission

27.    Special Investigation Unit

28.    Indemnity of officers of the Commission

Part IV – The Authority

29.    Establishment of the Nigerian Midstream and Downstream Petroleum Regulatory Authority

30.    Application of this part

31.    The objectives of the Authority

32.    Functions of the Authority

33.    Regulations by the Authority

34.    Governing board of the Authority

35.    Functions of the board of the Authority

36.    Remuneration and allowances of members of the board of the Authority

37.    Suspension or removal of a member of the board of the Authority

38.    Resignation of a Non-Executive Member of the board of the Authority

39.    Vacancy on the board of the Authority

40.    Filling of vacancy on the board of the Authority

41.    Authority Chief Executive and Executive Directors of the Authority

42.    Employees of the Authority

43.    Terms and conditions of service in the Authority

44.    Remuneration and allowances of employees of the Authority

45.    Statement of estimated income and expenditure of the Authority

46.    Secretary to the Authority

47.    Fund of the Authority

48.    Notice to the Authority

49.    Special powers of the Authority

50.    Special Investigation Unit

51.    Indemnity of officers of the Authority

52.    The midstream gas infrastructure fund

Part V – The Nigerian National Petroleum Company Limited

53.    The Nigerian National Petroleum Company limited

54.    Transfer of assets and liabilities

55.    Appointment of NNPC limited as agent of NNPC

56.    Subsistence of guarantee

57.    Transfer of employees and conditions of service

58.    The board of NNPC limited

59.    Composition of the board of NNPC limited

60.    Committees of the board of NNPC limited

61.    Application of principle of corporate governance

62.    Annual audit of NNPC limited

63.    Responsibilities of the board of NNPC limited

64.    The objects of NNPC limited

65.    Establishment of incorporated joint venture companies

CHAPTER TWO – ADMINISTRATION

Part I – General Administration

66.    Objectives

67.    Management of petroleum resources

Part II – Administration of Upstream Petroleum Operations

68.    Administration of acreage and vesting of data

69.    National grid system

70.    Licenses and leases

71.    Petroleum exploration license

72.    Petroleum prospecting license

73.    Bidding process

74.    Award process

75.    Licensing round guidelines

76.    Model license and model lease

77.    Duration and area of petroleum prospecting license

78.    Work commitment, commercial discovery and significant gas discovery

79.    Commercial discovery and field development plan

80.    Unitization

81.    Petroleum mining leases

82.    Exclusive right to conduct operations

83.    Confidentiality

84.    Power to enter into contracts

85.    Model contracts

86.    Duration and renewal of leases and licenses

87.    Conditions for renewal of petroleum mining leases

88.    Relinquishment

89.    Surrender of license or lease

90.    Rights of way relating to upstream petroleum operations

91.    Rights of way reserved for the Commission

92.    Voluntary conversion of an oil prospecting license to a petroleum prospecting license or oil mining lease to petroleum mining lease

93.    Relinquishment upon renewal or conversion of an oil mining lease

94.    Marginal field

95.    Assignments, mergers, transfers and acquisitions

96.    Grounds for revocation of license or lease

97.    Notice of default prior to revocation

98.    Administration of a revoked producing lease

99.    Power of revocation of participating or shareholders interest

100. Fees

101. Damage to protected and venerated objects

102. Environmental management

103. Financial contribution for remediation of environmental damage

104. Gas flaring penalties

105. Prohibition of flaring or venting of natural gas

106. Measurement of flared natural gas

107. Exemption

108. Natural gas flare elimination plan

109. Domestic crude oil supply obligations

110. Domestic gas delivery obligations

Part III – General Administration of Midstream and Downstream Petroleum Operations

111. Matters relating to license applications

112. Advertisement of license applications

113. Licensing regulations

114. Conditions in licenses or permits

115. Compensation for acquisition of land

116. General non-discrimination

117. Assignment or transfer of license or permit

118. Suspension and amendment of conditions in a license or permit

119. Surrender of license or permit

120. Grounds for the revocation of a license or permit

121. Notice of default prior to revocation

122. Tariff principles

123. Tariff methodology

124. Approval and publication of charging structures

Part IV – Administration of Midstream and Downstream Gas Operations

125. Activities requiring a license midstream and downstream gas operations

126. Special regulations for midstream and downstream gas operations

127. Rights of way in relation to midstream and downstream gas operations

128. Surface rights reserved for the Authority relating to midstream and downstream gas operation

129. Grant of a gas processing license

130. General duties of the holder of a gas processing license

131. Conditions applicable to a gas processing license

132. Grant of a bulk gas storage license

133. General duties of a bulk gas storage licensee

134. Conditions applicable to a bulk gas storage license

135. Grant of gas transportation pipeline license

136. General duties of a transportation pipeline owner

137. Conditions applicable to a gas transportation pipeline license

138. Grant of gas transportation network operator license

139. General duties of a gas transportation network operator

140. Powers of a gas transportation network operator

141. Conditions applicable to a gas transportation network operator license

142. Grant of a wholesale gas supply license

143. General duties of a wholesale gas supplier

144. Rights of a wholesale gas supplier

145. Conditions applicable to a wholesale gas supply license

146. Grant of a retail gas supply license

147. General duties of a gas retailer

148. Grant of gas distribution license

149. General duties of a gas distributor

150. Rights of the gas distributor

151. Conditions applicable to a gas distribution license

152. Arrangements for gas distribution

153. Domestic gas aggregation license

154. Functions of the domestic gas aggregator

155. Establishment of the aggregator

156. Gas purchase orders

157. Price conditions of gas purchase orders

158. Wholesale customers

159. Trading and settlement of wholesale gas

160. Gas network code

161. Third party access relating to midstream and downstream gas operations

162. Conditions for the provision of open access in relation to gas operations

163. Disputes in respect of third party access

164. Customer protection

165. Provision of service to customers

166. Transfer of customers

167. Natural gas prices for the strategic sector, gas distributors and retailers

168. Gas based industries gas price

169. Power to regulate and review prices

170. Pricing principles in relation to gas

171. Public service obligations related to policy issues

172. Public service levy

173. Domestic Gas Demand Requirement

Part V – Administration of Midstream and Downstream Petroleum Liquids Operations

174. Activities requiring a license for midstream and downstream petroleum liquids operations

175. Special regulations for midstream and downstream petroleum liquids operations

176. Rights of way relating to midstream and downstream petroleum liquids operations

177. Surface rights reserved for the authority for midstream and downstream petroleum liquids operations

178. Petroleum liquids midstream network code

179. Third party access relating to midstream and downstream petroleum liquids operations

180. Conditions for the provision of open access in relation to petroleum liquids operations

181. National strategic stocks

182. Operating stock

183. Grant of a crude oil refining license

184. General duties of a crude oil refiner

185. Access rights

186. Conditions applicable to a crude oil refining license

187. Grant of a bulk petroleum liquids storage license

188. General duties of a bulk storage licensee

189. Conditions applicable to a bulk petroleum liquids storage license

190. Grant of petroleum liquids transportation pipeline license

191. General duties of a petroleum liquids transportation pipeline owner

192. Conditions applicable to a petroleum liquids transportation pipeline license

193. Grant of transportation network operator license

194. General duties of a petroleum liquids transportation network operator

195. Powers of a petroleum liquids transportation network operator

196. Conditions applicable to a petroleum liquids transportation network operator license

197. Grant of a wholesale petroleum liquids supply license

198. General duties of a wholesale petroleum liquids supplier

199. Rights of a wholesale petroleum liquids supplier

200. Conditions applicable to a wholesale petroleum liquids supply license

201. Grant of license for distribution of petroleum products

202. General duties of petroleum product distributor

203. Grant of a license to construct and operate a facility for retail supply and distribution of petroleum products

204. Grant of a permit to construct and operate a facility for the production of petrochemicals

205. Pricing regime and power to regulate tariffs

206. Wholesale prices for petroleum products

207. Pricing principles in relation to petroleum products

208. Publication of prices

Part VI Other Matters Related to Midstream and Downstream Operations

209. Public service obligations

210. Competition and Market Regulation

211. Power to prevent anti-competitive behavior

212. Separation of certain licensed activities

213. Non-discrimination among customers

214. Considerations for exercise of the Authority’s powers

215. Power to serve notice, issue “cease and desist” order, etc.

Part VII – Common Provisions for Upstream, Midstream and Downstream Petroleum Operations

216. Consultation for regulations

217. Contravention and enforcement of conditions of leases, licenses or permits

218. Mandatory registration

219. Register of licenses, permits and authorizations

220. Preparation of licenses, permits and authorizations

221. Effective date and authentication of licenses, permits and authorizations

222. Register of memorials

223. Register of interests

224. Effect of registration

225. Public access to the registry

226. Default approvals

227. Disclosure of confidential or other information

228. Offences

229.  Penalties

230. Refusal to furnish, return or supply information

231. Power to issue administrative penalties

232. Abandonment, decommissioning and disposal

233. Decommissioning and abandonment fund

CHAPTER THREE

Host Communities Development

234. Objectives and regulations

235. Incorporation of host community’s development trusts

236. Timeframe for incorporation of host communities’ development trust

237. Transfer of settlor’s interest and obligations subject to host community’s development trust obligation

238. Failure to incorporate host communities development trust

239. Objectives of host community’s development trust

240. Sources of funding for petroleum host community’s development trust

241. Matters on which the funds may be utilized

242.  The Board of trustees, composition, management, etc.

243.  Duties and functions of the Board of Trustees

244.  Allocation of funds

245.  Matrix for distribution of trust fund

246.  Engagement of fund managers

247.  Management committee, composition, powers, etc.

248.  Duties and functions of the management committee

249.  Host community advisory committee, composition, etc.

250. Duties and functions of the host community advisory committee

251. Host community needs assessment

252. Contents of host community development plans

253. Financial year of the host community’s development trust

254. Accounts and audit

255. Mid-year and annual reports

256. Exemption from income tax

257. Deduction of payment for petroleum host community development

CHAPTER FOUR – Petroleum Industry Fiscal Framework

Part I – Objectives and Administration

258. [Deleted by section 197(31 of the National Tax Act, 2023] Objectives

259. [Deleted by section 197(31 of the National Tax Act, 2023] Administration

Part II – Hydrocarbon Tax

260. [Deleted by section 197(31 of the National Tax Act, 2023] Application of this Part

261. [Deleted by section 197(31 of the National Tax Act, 2023] Charge of hydrocarbon tax

262. [Deleted by section 197(31 of the National Tax Act, 2023] Ascertainment of crude oil revenue, adjusted profit, assessable profits and chargeable profits

263. [Deleted by section 197(31 of the National Tax Act, 2023] Allowable deductions

264. [Deleted by section 197(31 of the National Tax Act, 2023] Deductions not allowed

265. [Deleted by section 197(31 of the National Tax Act, 2023] Assessable Profits and Losses

266. [Deleted by section 197(31 of the National Tax Act, 2023] Chargeable profits and allowances

Part III – Ascertainment of Chargeable Tax

267. [Deleted by section 197(31 of the National Tax Act, 2023] Chargeable Tax

268. [Deleted by section 197(31 of the National Tax Act, 2023] Additional Chargeable Tax payable in certain circumstances

Part IV – Ascertainment of Total Profits and Consolidation for Tax Purposes

269. [Deleted by section 197(31 of the National Tax Act, 2023] Artificial transactions, etc.

270. [Deleted by section 197(31 of the National Tax Act, 2023] Assessable Profits and adjusted Losses

271. [Deleted by section 197(1) of the National Tax Act, 2023] Trade or business sold or transferred

272. [Deleted by section 197(1) of the National Tax Act, 2023] Consolidation of costs and taxes

Part V – Persons Chargeable

273. [Deleted by section 197(1) of the National Tax Act, 2023] Partnerships, etc.

274. [Deleted by section 197(1) of the National Tax Act, 2023] Company wound up, etc.

275. [Deleted by section 197(1) of the National Tax Act, 2023] Avoidance by transfer

276. [Deleted by section 197(1) of the National Tax Act, 2023] Indemnification of representative

Part VI – Applicability, Accounts and particulars

277. [Deleted by section 197(1) of the National Tax Act, 2023] Preparation and delivery of accounts and particulars

278. [Deleted by section 197(1) of the National Tax Act, 2023] Power of the Service to request further information

279. [Deleted by section 197(1) of the National Tax Act, 2023] Power to call for returns, books, etc.

280. [Deleted by section 197(1) of the National Tax Act, 2023] Returns of estimated tax

281. [Deleted by section 197(1) of the National Tax Act, 2023]Extension of periods for making returns

282. [Deleted by section 197(1) of the National Tax Act, 2023]Assessment of Tax Payable

283. [Deleted by section 197(1) of the National Tax Act, 2023]Additional assessments

284. [Deleted by section 197(1) of the National Tax Act, 2023]Making of assessments, etc.

285. [Deleted by section 197(1) of the National Tax Act, 2023]Notices of assessment, etc.

286. [Deleted by section 197(1) of the National Tax Act, 2023]Errors and defects in assessment and notice

287. [Deleted by section 197(1) of the National Tax Act, 2023] Tax computation

Part VII – Appeals

288. [Deleted by section 197(1) of the National Tax Act, 2023] Appeals to Tax Appeal Tribunal

289. [Deleted by section 197(1) of the National Tax Act, 2023] Assessment to be final and conclusive

Part VIII – Collection, Recovery and Repayment of Tax

290. [Deleted by section 197(1) of the National Tax Act, 2023] Procedure in cases where objection or appeal is pending

291. [Deleted by section 197(1) of the National Tax Act, 2023] Time within which payment is to be made

292.  [Deleted by section 197(1) of the National Tax Act, 2023] Penalty for non-payment of tax and enforcement of payment

293.  [Deleted by section 197(1) of the National Tax Act, 2023] Collection of tax after determination of objection or appeal

294.  [Deleted by section 197(1) of the National Tax Act, 2023] Suit for tax by the Service

295.  [Deleted by section 197(1) of the National Tax Act, 2023] Relief in respect of error or mistake

296.  [Deleted by section 197(1) of the National Tax Act, 2023] Repayment of tax

Part IX – Offences and Penalties

297.  [Deleted by section 197(1) of the National Tax Act, 2023] Penalty for defaults

298.  [Deleted by section 197(1) of the National Tax Act, 2023] Penalty for making incorrect accounts, etc.

299.  [Deleted by section 197(1) of the National Tax Act, 2023] False statements and returns

300.  [Deleted by section 197(1) of the National Tax Act, 2023] Penalties for offences by authorized and unauthorized Persons

301.  [Deleted by section 197(1) of the National Tax Act, 2023] Tax to be payable notwithstanding any proceedings for penalties

Part X – Application of Companies Income Tax to Petroleum Operations

302.  [Deleted by section 197(1) of the National Tax Act, 2023] General requirement of companies engaged in petroleum operations to pay companies income tax

Part XI – General Provisions

303.  [Deleted by section 197(1) of the National Tax Act, 2023] General Application of this Part and other matters

304.  [Deleted by section 197(1) of the National Tax Act, 2023] Regulations, rules and forms

305.  [Deleted by section 197(1) of the National Tax Act, 2023] Fiscal stabilization

306.  [Deleted by section 197(1) of the National Tax Act, 2023] Royalty

CHAPTER FIVE – Miscellaneous Provisions

307. Legal proceedings, etc.

308. Pre-Action Notice

309. Consequential Amendments

310. Repeals

311. Saving provisions

312. Transfer of assets and liability to the Commission

313. Transfer of assets and liability to the Authority

314. Transfer of employees and conditions of service

315. Movement of staff of the institutions

316. Transfer of Existing Host Community Development Projects and Host Community Development Schemes

317. Transitional and Savings Provisions related to Chapter Four

318. Interpretation

319. Short title

Schedules

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PETROLEUM INDUSTRY ACT, 2021

ACT No. 6

[As Amended by the National Tax Act]

AN ACT TO PROVIDE LEGAL, GOVERNANCE, REGULATORY AND FISCAL FRAMEWORK FOR THE NIGERIAN PETROLEUM INDUSTRY, THE DEVELOPMENT OF HOST COMMUNITIES AND FOR RELATED MATTERS.

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[COMMENCEMENT]              [16TH AUGUST, 2021]

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[The Senate and House of Representatives passed the bill on July 15, 2021, and July 16, 2021 respectively]

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ENACTED by the National Assembly of the Federal Republic of Nigeria as follows – –

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