A segment of the Petroleum Industry Governance Bill (PIGB) was passed by the Senate in 2017 and is expected to reorganise the legal and fiscal terms governing the oil and gas sector.The bill has recently been passed by the House of Representatives and only needs to be assented by the President before it is law.Companies operating with a concession or license in the oil sector are liable to pay royalties, petroleum profit tax and corporate income tax. In many cases, production-sharing contracts between the government and petroleum companies also determine the fiscal terms of oil and gas operations in the country. Companies involved in mining activities are liable to company income tax (20% or 30%), capital gains tax (10%), value added tax (5%) and education tax (2%) among others.

The state participates in the oil and gas sector through its national oil company, NNPC, and its various subsidiaries, which represent government interests in the various production arrangements and contracts in the oil and gas sector. The government is on the path of restructuring the NNPC as part of the reforms under the PIB.

Licenses 

In accordance with the Petroleum Act, the Ministry of Petroleum Resources, through the Department of Petroleum Resources is empowered to oversee the license allocation process in the oil and gas sector. Oil and gas licenses are awarded through open tenders or direct negotiations, and the Minister of Petroleum Resources is empowered to grant licenses on a discretionary basis.

In the mining sector, the Mining Cadastre Office is responsible for granting licences and for maintaining a records of all license applications. Licenses are granted according to the Guidelines on Mineral Titles Application and on a “first come, first served” basis

Objectives of beneficial ownership transparency in Nigeria

• Anti-corruption agenda and the ongoing oil sector reforms.
• Government’s commitment to implementing Open Contracting Data Standard, and the establishment of a publicly accessible registry of the licensed owners of all companies operating in Nigeria.
• Elimination of all forms of corruption through transparency and accountability in the extractive industry.

Progress on implementing beneficial ownership disclosure 

Nigeria proved its desire to implement beneficial ownership when they participated in the beneficial ownership pilot in 2015. Both the oil and gas and the mining audit provides legal ownership for the companies, which in some cases are natural persons. The report does not confirm if these natural persons are legal owners or beneficial owners. Concerns over confidentiality in disclosing beneficial owners, lack of political will and legislation requiring ownership disclosure were key challenges outlined in Nigeria's evaluation report. 

Nigeria EITI plans to organize a series of technical workshops to build capacity in beneficial ownership disclosure. Read Nigeria's beneficial ownership roadmap below for more information. 

Nigeria is Africa's largest producer of crude oil. In 2015 - total crude oil production was 776,668,000 barrels, a decrease of 2.74% compared to previous year. In terms of exports, a total of 60,557,000 barrels of crude oil was exported.In the gas sector, a total of 3,250,667.66 million standard cubic feet per day of natural gas production was reported by thirty-four (34) companies. This shows an increase of 25.36% when compared with 2014 production. Export gas sales volume increased by 1.72% (16 thousand metric tons) in 2015 (i.e. 951 thousand metric tons in 2014 and 967 thousand metric tons in 2015). 

Nigeria is richly endowed with various types of mineral resources.The 2015 NEITI Solid Minerals Audit report notes that the government is committed to diversifying the nation's economy; from dependence on oil revenue to non-oil revenues. In September 2016, the Federal Government of Nigeria through the Ministry of Mines and Steel Development, re-launched the Solid Mineral Policy Roadmap, aimed at ensuring policy continuity and consistency in the sector. During the year, 2015, the total volume/quantity of actual mineral production was 30,520,114.59 tonne and the total volume/quantity used or sold was 39,272,590.75.