Library / [Type text] May 2017 GENERAL REQUIREMENTS AND GUIDANCE INFORMATION FOR THE ESTABLISHMENT OF
[Type text] May 2017 GENERAL REQUIREMENTS AND GUIDANCE INFORMATION FOR THE ESTABLISHMENT OF

Page 5 of 6
 
 
                    
 
   
 
 
 
Page 4 of 5 
 
c) Business Integration: Integration of this stakeholders as equity participants in the refineries 
as defined in Investor Category C. 
 
12. Government Support  
The Federal Governments assistance in the establishment / Conventional of a modular refinery will 
include: 
a. Facilitation of crude commercial agreements from marginal and other oil fields. 
b. Facilitation of Ownership-joint venture investment vehicles with organized host communities 
and State Governments. 
 
13. Fiscal Incentives 
Modular Refineries being midstream oil and gas processing facilities shall qualify for all incentives 
enumerated under section 39 of the Companies Income Tax Act CAP. 60 LFN 1990. The relevant 
provisions of the act are;   
(i) A company engaged in gas utilization (downstream operations) shall be granted the following 
incentives, that is-  
 (a) an initial tax free period of three years which may, subject to the satisfactory 
performance of the business, be renewed for an additional period of two years;  
(b) as an alternative to the initial tax free period granted under paragraph (a) of this 
subsection, an additional investment allowance of per 35 per cent - which shall not 
reduce the value of the asset, so however that a company which claims the incentive 
provided under this paragraph shall not also claim the incentive provided under 
paragraph (b) (ii)) of this subsection;"  
(c) accelerated capital allowances after the tax free period, as follows, this is-  
(i) an annual allowance of 90 percent with 10 percent retention, for investment in 
plant and machinery,  
(ii) an additional investment allowance of 15 percent which shall not reduce the 
value of the asset;  
(d) tax free dividend during the tax free period, where-  
 (i) the investment for the business was in foreign currency, or  
 (ii) the introduction of imported plant and machinery during the period was not 
less than 30 percent of the equity share capital of the company;  
(e) interest payable on any loan obtained with the prior approval of Minister for a gas 
project, shall be deductible.  
 (2) The tax free period of a company shall start on the day the company 
commences production as certified by the Ministry of petroleum Resources  
It is anticipated that the fiscal reform bill shall include amendments to section 39 of CITA to 
properly reflect midstream oil and gas operations 
 
14. Application 
Application for a license to construct or operate a refinery shall be made to the Minister of 
Petroleum Resources (through the DPR) and shall be in Form A in the Schedule to the PRR and may 
be granted subject to such terms and conditions as the Minister may prescribe.