Can you provide a detailed overview of ACAS-Law and the range of services it offers to the African oil industry?

ACAS-Law is composed of four distinct practice groups that cater to various aspects of the legal needs of the African oil industry. The Energy and Project Finance Group focuses on crucial oil and gas transactions, including those related to the value chain, power, mining, and other corporate and commercial matters. The Corporate and Commercial Group handles diverse activities such as mergers and acquisitions, banking and finance, intellectual property, tax, real estate, foreign investment, telecommunications, privatisation, capital markets, employment law, transport and infrastructure, and immigration. The Shipping and Dispute Resolution Group specializes in admiralty and maritime transactions, international trade, aviation, insurance, commercial litigation, and alternative dispute resolution. Lastly, ADCAX Nominees Limited, a subsidiary of ACAS-Law, provides dedicated services in company secretarial matters, corporate governance, and compliance for our clients.

Can you provide more details about the current legal framework surrounding the oil and gas industry in Nigeria?

Nigeria’s oil and gas industry operates under two main laws: the Petroleum Act and the Petroleum Profits Tax Act (PPTA). These laws form the foundation of the industry’s regulatory framework. Additionally, there are numerous other laws and subsidiary legislations that govern specific aspects of the oil and gas sector, ranging from environmental impact regulations to local content requirements. In the past, the Nigerian government initiated the Oil and Gas Implementation Committee (OGIC) in 2000, tasked with privatizing the industry. During the committee’s deliberations, the OGIC expanded its mandate to review the legal and regulatory framework of the entire industry. As a result, a draft law known as the Petroleum Industry Bill (PIB) was produced. However, the PIB is yet to be passed into law, creating uncertainty that hinders investment. In the absence of the PIB, it may be wiser for companies to invest based on existing laws, as waiting for the PIB’s passage may result in missed opportunities. The existing laws and draft versions of the bill provide some direction for investment decisions, which can be modified as necessary in the future.

How can the passage of the Petroleum Industry Governance Bill (PIGB) improve the oil and gas industry?

The passage of the Petroleum Industry Governance Bill (PIGB) would bring about much-needed certainty and stability to the industry. It is expected to boost investor confidence by addressing crucial issues related to governance and institutional frameworks. The PIGB represents the first phase of the broader Petroleum Industry Bill (PIB) and was designed to be implemented in manageable segments. However, it recently faced a setback when it was refused presidential assent. Nevertheless, the PIGB remains an earnest effort to resolve regulatory overlaps and improve the operations of the national oil company, the NNPC.

Can you provide insights into the licensing process and local content regulations in Nigeria’s oil and gas industry?

Nigeria has enacted the Nigerian Oil and Gas Industry Content Development Act, commonly known as the Local Content Act. This legislation stipulates that priority should be given to Nigerian companies, goods, and services in the oil and gas industry. It also sets a minimum requirement for Nigerian content in any project executed within the industry. While strict compliance with the law is the goal, full implementation can sometimes be challenging. To address this, the Minister of Petroleum Resources has the authority to grant waivers under the Local Content Act, allowing for foreign involvement in cases where there is insufficient local capacity. However, the granting of such waivers is subject to the demonstration of a commitment to enhance indigenous capacity within the country.

It has been mentioned that 2020 is the year of natural gas in Nigeria. Is there a legal framework in place to support the development of the natural gas sector?

Nigeria does have an existing legal framework that provides incentives for the development of natural gas projects and gas production. These incentives are primarily outlined in the Companies Income Tax Act, albeit they have not been entirely effective in attracting the necessary capital investments for accelerated development in the sector. To further support the natural gas industry, it is crucial to encourage the liberalization of gas prices based on market indices and cost-reflective electricity tariffs. Such measures would incentivize development and the fulfillment of domestic supply obligations.

To what extent does corruption affect the oil and gas industry in Nigeria, and how does it hinder industry growth?

Corruption has a detrimental impact on business operations and impedes the growth of the Nigerian economy. The government recognizes the importance of eradicating corruption and has made some progress in addressing the issue. However, further concerted efforts are needed to eliminate corruption effectively. Additionally, allocating more resources to safeguard oil and gas installations and deter sabotage and vandalism is crucial for combating corruption within the industry.

It is worth noting that the challenge lies not only in the absence of legislation but also in the enforcement of existing laws. Overcoming these challenges is complex due to the intersecting factors of social, environmental, and political nature. Nigeria is still in the process of developing tailored solutions to address these multifaceted issues.

What is ACAS-Law’s vision for the future?

ACAS-Law is embarking on a journey to establish itself as the premier corporate commercial law firm in Nigeria and the wider sub-Saharan African region. Our vision is centered around providing practical and customized solutions to complex legal problems with the shortest turnaround time possible. We strive to continue growing and aim to gain international recognition as a trusted brand in the legal industry.