How will the new law encourage Nigerian entrepreneurs to fully participate in the oil and gas sector?
The PIB will encourage the development of small fields with significant low tax incentives having a bottom level of 5 percent royalty scale, based on daily oil production. This provision is a deliberate effort to encourage Nigerian entrepreneurs to partake in the oil and gas sector business. In addition, the local content provision has been incorporated into the new law which would require all projects and procurements to have Nigerian content elements in them. By this, all purchase of local goods and services in the oil industry will receive a significant boost, given that the new PIB makes only 80 percent of foreign costs deductible for Nigerian Hydrocarbon Tax purposes. The deregulation of the downstream sector coming alongside the reform is also expected to stimulate economic activities in the country as new areas of local entrepreneurship skills will be promoted to enhance the operation and management of the downstream assets under a deregulated regime.
