Going Into the Oil Business In Nigeria

Going-into-the-oil-business

“The Kingdom of Heaven runs on righteousness,

but the kingdom of earth runs on oil!”

–Ernest Bevin–

The Right Honourable Ernest Bevin, British Foreign Secretary (1945 – 1951), can be forgiven for making the cynical statement above during a heated debate in the British Parliament, given the dominance of oil in human affairs for the past one hundred years or more.

Petroleum, or crude oil, is a naturally occurring oily bituminous liquid, which forms the raw material for a wide range of fuels and other products. Modern industrial civilisation, with its mega-cities and sprawling suburbs, replete with labour-saving appliances and electronic gadgets, is possible largely because of the ample and inexpensive supply of petroleum and its products. This dependency of modern civilisation, in its present form, on petroleum (and the other fossil fuels, gas and coal) is the subject of much contention, against the backdrop of growing concern for the environment, triggered by the growing body of evidence that indicate global warming. Short-term cost considerations continue to present hurdles to the search for and development of competitive alternative energy sources to fossil fuels – preferably renewables. Meanwhile, as long as the oil industry endures, which from all indications will be far into the foreseeable future, you are encouraged to explore its tremendous business possibilities if you are so inclined.

PETROLEUM INDUSTRY IN NIGERIA

The petroleum industry of Nigeria is the largest industry in Africa, and is underpinned by proven reserves of: 37 billion of crude oil, and 187 trillion standard cubic feet of gas (unproven gas reserves estimated at 600 trillion SCF).

With a total of 1,481 wells in operation from 159 oil fields, the Nigerian Oil & Gas Industry contributes about 14 percent to the nation’s Gross Domestic Product (GDP) of over US$500 billion. The nation’s proven natural gas reserves (about three times its crude oil reserves in energy content) are operated in joint exploration and production ventures with several companies.

Individuals and companies wishing to participate in the Nigerian Oil & Gas Industry must have the appropriate licenses and permits. The journey to the acquisition of these licenses and permits must commence (and often end) with the Department of Petroleum Resources (DPR). Below are the guidelines and requirements for the various sections of the oil and gas industry to be met before a license or permit is granted.

DEPARTMENT OF PETROLEUM RESOURCES

GUIDELINES AND REQUIREMENTS FOR THE APPLICATION OF OIL AND GAS INDUSTRY SERVICES PERMIT (OGISP)

INTRODUCTION:

This document is to provide guidance to applicants while applying for service permits under the existing categorization/classifications, particularly in the area of choosing jobs and knowing the appropriate categories/classification such service(s) belong, the maximum number of jobs permissible under the cover of a permit, relevant accreditation/registration documents required for some services and assigned statutory fees, amongst others. There are three (3) categories of jobs viz: General, Major and Specialized categories. A company may apply for and obtain permits in more than one category, provided it is registered by Corporate Affairs Commission (CAC), and has the appropriate legal status as well as the competencies/capabilities/equipment for carrying out such jobs. This guideline is however not exhaustive.

LEGAL FRAMEWORK

These guidelines are issued pursuant to Section 8, subsection 1(a) and 9, subsection 1(a) & (h) of the Petroleum (Drilling and Production) Amendment Regulations 1988, which empowers the Director of Petroleum Resources to formulate Regulations/Guidelines from time to time for the smooth and safe operations in the Oil and Gas Industry and section 60A of the Petroleum (Drilling and Production) Amendment Regulations 1988, which provides that no company shall render or be engaged to render technical services to the Oil Industry without first being registered and issued a permit to carry out such services by the Director of Petroleum Resources. On the basis of this legal framework, any service company that operates in the Oil and Gas sector without a service permit is in contravention of the provision of the above Regulation.

GENERAL INFORMATION

  1. EFFECTIVE JANUARY 1, 2012 ALL PERMITS ISSUED PURSUANT TO THESE GUIDELINES SHALL EXPIRE ON THE ANNIVERSARY OF THE DATE OF ISSUE.
  2. DPR DOES NOT ENCOURAGE THE USE OF TOUTS, AND WILL NOT INDEMNIFY ANY COMPANY OR PERSON AGAINST ANY LOSS ARISING THEREFROM.
  3. FORGED AND/OR FAKE DOCUMENTS RENDERS AN APPLICATION VOID AND STATUTORY FEES PAID WILL BE FORFEITED (company to be blacklisted).
  4. APPLICATIONS ARE RECEIVED THROUGHOUT THE YEAR: FOR ENQUIRIES, PLEASE VISIT OGISP WEBSITE (ogisp.dpr.gov.ng) OR CALL 2790000 EXT. 50240 – 2, 9037150 OR LIVE CHAT.
  5. ALL APPLICATIONS IN THE MAJOR AND SPECIALIZED CATEGORIES MAY BE SUBJECT TO FURTHER EVALUATION. SUCH APPLICATIONS MAY TAKE LONGER TO PROCESS.
  6. TAX CLEARANCE CERTIFICATES UPLOADED IN APPLICATIONS DURING THE PRECEEDING PERMIT YEAR REMAIN VALID AND ACCEPTABLE FOR PERMITS RENEWAL PURPOSES UNTIL 30TH APRIL OF THE NEW PERMIT YEAR (THIS IS IN LINE WITH THE FEDERAL TAX LAWS).
  7. COMPANIES REGISTERED AS ENTERPRISES CAN APPLY FOR AND BE ISSUED MAJOR CATEGORY PERMIT ONLY IN CERTAIN AREAS OF. CONSULTANCY SERVICES.E.G…LEGAL, ARCHITECTURE, QUANTITY.SURVEYING, ESTATE/ PROPERTY MGT. ETC THEY WILL NOT BE ACCEPTED FOR SPECIAL CATEGORY PERMITS (REFER TO EXEMPTIONS TO THE GENERAL RULE: ENTERPRISES ARE ALLOWED TO OFFER TECHNICAL CONSULTANCY AS IN SECTION 56 OF THE COMPANIES ACT).
  8. PERSONAL INCOME TAX CLEARANCE OF DIRECTORS FOR COMPANIES REGISTERED AS ENTERPRISES ARE ACCEPTABLE; ONLY FEDERAL INLAND REVENUE SERVICES (FIRS) TAX CERTIFICATES (WHT) ARE ACCEPTABLE FOR LIMITED LIABILITY COMPANIES.
  9. SERVICE PROVIDERS (COMPANIES) THAT FAIL TO RENEW THEIR PERMITS FOR MORE THAN THREE (3) CONSECUTIVE YEARS WILL HAVE THEIR APPLICATIONS TREATED AS NEW.
  10. ALL APPLICATIONS FOR CRITICAL SERVICES (SPECIALIZED CATEGORY) SHALL REQUIRE: RELEVANT CERTIFICATIONS; REGISTRATION AND/OR AVAILABILITY OF APPROPRIATE EQUIPMENT. SERVICES ARE TO CONFORM WITH INTERNATIONALLY RECOGNIZED SYSTEMS E.G. DIVING; UNDERWATER INSPECTIONS AND RELATED SERVICES. THESE SHALL INCLUDE EVIDENCE OF AVAILABILITY OF DIVERS TO THE COMPANY; VALID PROFESSIONAL DIVING QUALIFICATION(S); ALID MEDICAL CERTIFICATION BY A HYPERBARIC DOCTOR & RELEVANT EQUIPMENT. COMPANIES SEEKING TO OFFER ROPE ACCESS SERVICES MUST HAVE CERTIFICATION SUCH AS IRATA CONFIRMING QUALITY, TRAINING & SAFE WORK PRACTICES AT HEIGHTS.
  11. ALL OFFSHORE OPERATIONS/OPERATORS MUST INDICATE AVAILABILITY/ POSSESSION OF OFFSHORE SAFETY PERMIT (OSP) OBTAINABLE FROM DPR FOR STAFF.
  12. SUCCESSFUL PRESENTATION & APPROVAL ISSUED FOR INTENDED WASTE MANAGEMENT SERVICES, LABORATORY SERVICES AND SAFETY TRAINING PROVIDERS SHALL PRECEDE THE ISSUANCE OF A PERMIT.
  13. THE SERVICES LISTED UNDER THE THREE BROAD CATEGORIES ARE NOT EXHAUSTIVE. SERVICE PROVIDERS SHOULD SEEK FOR GUIDANCE BEFORE SUBMISSION. PLEASE, FOR ENQUIRIES: VISIT OGISP WEBSITE (ogisp.dpr.gov.ng) OR CALL 2790000 EXT. 50240 – 2, 9037150 OR LIVE CHAT.
  14. GRANTING OF MULTIPLE JOBS UNDER THE COVER OF ONE PERMIT SHALL BE BASED ON COMPANY’S CAPABILITIES AND WILL BE AT THE DISCRETION OF THE DIRECTOR OF PETROLEUM RESOURCES.
  15. THIS GUIDELINE IS SUBJECT TO REVIEW WITHOUT NOTICE AT THE DISCRETION OF THE DIRECTOR OF PETROLEUM RESOURCES. COMPLETING THE ONLINE APPLICATION

All applications are to apply online.

  1. Online Application – It must be duly completed. All addresses, telephone numbers and e-mail must be correct and functional at the time of submission. Any change should be promptly communicated to the Department.
  2. Documents – All required documents should be clearly scanned and uploaded to the portal using PDF or JPEG format (4MB maximum) Uploading Zipped documents not allowed.
  3. Expatriate Quota – Companies requiring Expatriate Quota for their businesses in the oil and gas sector are required to justify to the DPR, the positions needed before applying to the Federal Ministry of Interior. Such companies are also required to make annual returns to the Department on their HR Indigenization programme. Any position or quota not endorsed/approved by the Director of Petroleum Resources will not be accepted.
  4. Certification by Professional Bodies – Applications under major and specialized categories whereby services are rendered by professionals or licensed/certified practitioners are required to attach certificates of membership of Company or relevant documents that govern or control such operations in Nigeria e.g. (i) COREN for construction and engineering. (ii) Nigerian Environmental Society (NES), Institute of Safety Professionals of Nigeria (ISPON), Nigerian Institute of Science and Laboratory Technologists (NISLT), Nigerian Conservation Society (NCS) etc. for environmental related jobs. (iii) Nigerian Security & Civil Defense approval for security jobs, Nigerian Ports Authority (NPA) and Customs licence for Freight, Clearing and Forwarding. Others include Nigerian Bar Association (NBA), Pharmaceutical Council of Nigerian (PCN), Nigerian Tourism Council, Nigerian Maritime Administration and Safety Agency (NIMASA), Recruiters License for Manpower Supply etc.

HEALTH, SAFETY, ENVIRONMENT AND COMMUNITY (HSEC) Policy – This should reflect the nature of the job i.e. should be operations/job specific; and applies to companies whose operations are within communities.

INSPECTIONS

The DPR would conduct inspection/assessment of the facilities for all new applicants under the major and specialized categories, prior to a consideration for the issuance of permits. Inspections would also be conducted on companies whose permits had not been renewed for more than three (3) years preceding an application. All applications under Major and Specialized categories will be subjected to further evaluation by relevant Divisions/Units in the DPR; and will be assessed for their professional competencies and capabilities. It may be necessary to inspect existing companies/businesses that have applied for renewals from time to time. Companies must have as a minimum, physical presence in Nigeria. Inspections are without notice and without prejudice to existing permits and/or approvals.

STATUTORY FEES

All statutory fees remain unchanged except for newly introduced processing fees as highlighted hereunder:

CATEGORY STATUTORY FEE

 

STATUTORY FEES

(N)

 

PROCESSING FEE

(N)

 

General 5,000.00 250.00
Major 25,000.00 500.00
Specialized 250.000.00 750.00

MODE OF PAYMENT

Payments can be made directly through any Nigerian bank or any convenient electronic payment option – Mastercard, Visa, Verve, Quickteller

PAYMENT DOES NOT GUARANTEE A PERMIT!!

HOW TO APPLY

Applicants for either renewal or new permit should apply by going through the following processes:

Step 1: logon to: www.dpr.gov.ng or ogisp.dpr.gov.ng

Step 2: create your company account

Step 3: fill application form attach all applicable documents

Step 4: submit your application

DOCUMENT VERIFICATION AND PENALTIES

Please note that applications with false or forged documents will be disqualified with applicant forfeiting the remitted fees. DPR also reserves the right to prosecute on this regard.

USE OF REPRESENTATIVES

DPR will not deal with unauthorized representatives of applicant

CATEGORIES OF PERMIT

There are three categories of permits: Namely; General Purpose, Major and Specialized.

GENERAL PURPOSE

This category covers minor supply, works and maintenance services; and companies in this category provide services that do not require specialized or certified competences. Applicants are therefore, expected to choose maximum of three (3) services/jobs from the three (3) classifications; not more than two services from the works classification.

Registration under the General Purpose Category attracts a statutory fee of N5, 000.00 (Five Thousand Naira) with processing fee of N500.00 (Five hundred naira). The following are job groupings under this category:

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Research by: Dr. Peter Agbugui

Edited by: Ian G. Udoh

For nigeriaheartbeat.com

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