Without any doubt, oil and gas is one of the most profitable business sectors in Nigeria and as oil continually contributes a vast portion of the country’s GDP, more Nigerians have been encouraged to tap into the sector.
Just like other businesses, oil and gas has both startup peculiarities and generalities. If you think you have the required startup capital and would like to set up an oil and gas company of your own, you should be ready to find out the peculiarities and generalities involved in the startup.
Well, we’ve helped you compiled a detailed list of the requirements for starting an oil and gas business in Nigeria.
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Registering Your Company
This is the initial step in any startup preparation for oil and gas business in Nigeria. While CAC (Corporate Affairs Commission) is responsible for incorporating your oil and gas business, you’re expected to have the share capital of 1 million naira before you’re deemed fit to incorporate your oil and gas company. For the registration, you’ll be charged the sum of #85,000.
Acquiring a TIN (Tax Identification Number)
This can be obtained from the Nigerian Federal Inland Revenue Service (FIRS) and its major purpose is to enable you to keep a corporate bank account with the Nigerian bank of your choice.
Acquiring a DPR (Department of Petroleum) Permit
Obtaining a DPR permit is one of the compulsory steps for kick-starting an oil and gas business in Nigeria. Securing OFFSHORE SAFETY PERMIT is necessary for any company intending to render oil and gas servicing and there are 3 OGISP categories namely OGISP Special Category, OGISP Major Category and OGISP General Category. If your kind of oil and gas business only deals with the conveyance of minor goods, your business therefore requires the general DPR permit which you can apply for at the rate of #5000.
Acquiring NSITF (Nigeria Social Insurance Trust Fund) for Your Company
This is one of the prerequisites that qualify your business for a DPR permit. To obtain this, the authorities in charge will charge you a flexible sum based on the evaluation of your staff’s salaries.
Acquiring Your Company’s Tax Clearance Certificate
The Tax Clearance Certificate (TCC) is issued by the Federal Inland Revenue Service or its branch in your state. While TCC is considered essential for both individual and corporate businesses, it’s a document certifying that your tax record is in the appropriate order.
Establishing Physical Business Premises
Your oil and gas servicing company needs a strategic location (such as Lagos or Port Harcourt) for its day-to-day operation. You can as well consider the Nigerian Oil and Gas Free Zone for the rent of a suitable business office. Other things to factor into your startup preparation, along with the business premises, are employees and business technology.
Registering with PENCOM National Pension Commission
This will be a mandatory startup requirement if your oil and gas servicing company will hold more than 5 workers. Again, it serves as the requirement for securing membership of NiPex (Nigerian Petroleum Exchange) which is a branch of the Nigerian National Petroleum Corporation (NNPC)
Securing an ITF (Industrial Training Fund) Certificate
An ITF certificate constitutes the essential credentials for your oil and gas servicing company to meet up with the expectations for successful NiPex registration. The application for an ITF certificate can be done both online and through the conventional face-to-face method.
Registering with NIPEX (Nigerian Petroleum Exchange)
NiPex registration isn’t a mandatory requisite for your oil and gas business but if you hope to be a high-profile competitor in the oil and gas sector, it’s worthy of note that you need to attempt the NiPex registration which costs #25,000.
Registering with Production Companies (for Operating as a Service Company)
If your company will serve as an oil and gas servicing firm (as against being an oil and gas producer), you’ll have to register with production companies (such as NLNG, SHELL, TOTAL E&P, etc.) so that you’re able to partner with them.
Acquiring Technical Partner Memorandum of Agreement
This form of memorandum is necessary given that your oil and gas company’s in-house capability is not sufficient and as such, the company needs an overseas supplier in order to provide its services on a considerable scale.
Once you’ve duly satisfied the startup requirements outlined above, you’re good to launch your oil and gas firm and begin putting marketing strategies and other business tactics in place.
So far, we have discussed the essentials for starting an oil and gas business in Nigeria. If there are other credentials or prerequisites for getting your oil and gas business in motion, such credentials/prerequisites are more or less secondary requirements.