Library / B 843 Federal Republic of Nigeria Official Gazette No. 110
B 843 Federal Republic of Nigeria Official Gazette No. 110

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B 849
(b)  shallow water high-risk area being—
(i) a zone of 10 km seawards of a high-water mark, and
(ii) such other shallow water areas as the Authority may determine
as high risk ;
(c)  other onshore areas being the part of Nigeria that is defined as
onshore and frontier acreages in the Act, other than onshore high-risk areas;
(d)  other shallow water areas, being the part of Nigeria that is defined
as shallow water in the Act, other than shallow water high-risk areas ; or
(e)  deep water areas, being the part of Nigeria that is defined as deep
offshore in the Act.
(3) The Authority shall, prior to the first payment of the financial
contribution, notify the licensee of which category the license falls, such that
where all or part of an asset is situated —
(a) in an area that is considered an onshore high-risk area, the entire
licence shall be considered as being located in an onshore high-risk area ;
(b) in a shallow water area that is considered a shallow water high-risk
area, the entire licence shall be considered as being located in a shallow
water high-risk area ;
(c)  onshore and part in shallow water, the entire licence shall be
considered onshore ;or
(d)  in shallow water and part in deep offshore, the entire licence shall
be considered shallow water.
(4)  In determining the contribution to the Fund, the —
(a)  formula for the annual financial contribution shall be —
Financial contribution for a year = Fixed Contribution + (Midstream or
Downstream Capital Expenditure x CER) + (CL x CLR) + (CG x CGR) ;
(b) Midstreamor downstream capital expenditure shall not include
contributions to a decommissioning and abandonment fund ;
(c) amount of expenditure incurred during a relevant year, which is
characterised as expenditure of capital nature under the Companies Income
Tax Act, shall be included in the full amount incurred during the relevant
year and shall not be depreciated under the initial and annual allowances
rules for the purpose of the calculation of the financial contribution ;
(d) average daily capacity of a facility shall be the name plate capacity,
and where the capacity changes due to additional investment or
abandonment during the year, the average daily capacity shall be determined
by the sum of all capacities multiplied by the days such capacity is in
existence and dividing this amount with the number of days in such year,
and the result shall be rounded to entire barrels or thousand cubic feet ; and
Retention
Cap. C21,
LFN, 2004