In Nigeria, the oil and gas industry is a major source of income. Anyone wishing to start a Nigerian oil and gas business must meet specific statutory obligations. In this reading, the procedure to establish an oil and gas business in Abuja, Lagos, Bayelsa, Port Harcourt, and other oil states in Nigeria will be broken down step-by-step.

To establish an oil and gas company in Nigeria, the following steps need to be followed:

• Company Registration

  The First Step to take would typically be to register your potential oil company at the Corporate Affairs Commission.

  All companies belonging to citizens, foreigners or both are subject to this requirement. The companies and the Allied Matters are obliged to register all companies with the Committee on Corporate Affairs (CAC). The process is straightforward and is performed online by accredited CAC agents. This allows the company to acquire a different legal entity whereby it can sue, sue and acquire a property. The documents that the company receives upon registration provide legitimacy and build customers' confidence. They also serve as primary documents for which contracts or when opening a bank account are requested. You can also register as a company (business name).

  This is worthy of note that registration as an enterprise would restrict the activities which would normally be carried out, as it is more difficult to be granted certain permits as an enterprise.

• Registration with the National Investment Promotion Commission (NIPC)

  This is only necessary for companies with foreign participation. Each company with overseas investment or foreign participation must register before entering into business in Nigeria with the NIPC before being incorporated into the CAC, in accordance with the National Investment Promotion Commission Act.

• Procuring a Tax Clearance Certificate and Tax Compliance

  It is necessary for a company preparing to participate in the oil and gas industry to register with the Federal Inland Revenue Service (FIRS) and procure a Tax Clearance Certificate (TCC). The Tax Clearance Certificate essentially certifies that the Company's tax affairs for the previous year are in order, with no unpaid taxes. One of the advantages of obtaining a TCC is that it is a required part of the permit approval phase in the oil and gas industry.

• The Nigerian Social Insurance Trust Fund (NSITF) registration

  This program was created to look after the needs of employees. It provides financial security to private-sector workers in the event of old age, invalidity, termination of jobs, or death, and is paid to them or their survivors. Entities working in the petroleum sector in Nigeria must register with NSITF and make monthly contributions to the pension or retirement benefits, as well as payments for other work-related accidents, as this is a prerequisite for obtaining a license to operate in this sector.

• Licenses & Permits

  • Department of Petroleum Resources Permit

    This department is tasked with the duty to provide regulatory guidance throughout the entire oil and gas value chain in Nigeria under the responsibility of the ministry of petroleum resources. An application is sought and obtained for all licenses in the oil and gas sector before any person or entity may operate there. Depending on the service provided by the company, the DPR issues 3 categories of permits in the Oil and Gas Industry (OGISP) section. General, major and specialized categories of licenses. Certain documents and statutory fees will be required to process this license.

  • Nigerian Content Development and Monitoring Board (NCDMB) License

    The Nigerian Oil and Gas Industry Development Act of 2010 created the NCDMB. The Nigerian Oil and Gas Industry Content Joint Certification Scheme, which consolidates data on all major activities in the Nigerian Oil and Gas Industry, requires registration. The Board regulates the oil and gas industry to ensure compliance with Nigerian Content requirements, and it also focuses on capacity-building measures that will improve domestic competence.

  • Industrial Training Fund Certificate and Registration

    Employers with a minimum turnover of N50 million or more than five workers are required to contribute 1% of their payroll to the ITF. Suppliers, contractors, and consultants bidding on government or private-sector contracts must also contribute. As a result, a company planning to provide a service in the oil and gas sector must obtain this credential to demonstrate its contribution to the fun, which is used to facilitate and encourage the acquisition of skills in industry and commerce in order to create a pool of indigenously skilled workforce adequate to meet the economy's increasing needs.

  • Pension Registration

    The Pension Fund Administrators (PFA) in Nigeria will help you register for a pension. Unless the company plans to register with the Nigerian Petroleum Exchange or has more than 5 employees, it is not mandatory. However, it is recommended that companies register their employees in order for them to be able to save for retirement.

  • Registration with the Nigerian Petroleum Exchange

    This step is discretionary, but it is recommended if the organization plans to participate in major contract bidding platforms. If the company just carries on small contracts, this can be overlooked.

  • Registration with Production Companies

    This is crucial in order to gain access to the petroleum products that will be sold and to cooperate with the major oil producers, especially the International Oil Companies (IOC). Total, Shell, and others are among the producers.

    Finally, depending on one's resources or experience, there are a variety of business opportunities in the oil and gas market. Regardless, it is advisable to register an organization before participating in any oil and gas operations in Nigeria, and once a company has been licensed, it is mandatory to obtain sufficient licensing from the DPR and any other relevant regulatory agencies.