Overview

This document is the Deep Offshore and Inland Basin Production Sharing Contracts Decree 1999 (Decree No. 9) of the Federal Military Government of Nigeria. It establishes the legal framework for production sharing contracts (PSCs) in deep offshore and inland basin areas. Key provisions include: overriding other enactments, allowing the Minister to determine oil prospecting licence duration (minimum 5 years, aggregate 10 years), setting a flat 50% petroleum profits tax rate for PSC areas, and offering investment incentives (50% Investment Tax Credit for contracts before July 1, 1998, and 50% Investment Tax Allowance for contracts after that date). Royalty rates for deep offshore are graduated by water depth: 12% for 201-500 metres, 8% for 501-800 metres, 4% for 801-1000 metres, and 0% for over 1000 metres; inland basin royalty is 10%. Petroleum profit tax is computed and paid in US dollars. Royalty oil is allocated to the Nigerian National Petroleum Corporation (NNPC) or the Holder to cover royalty and concession rental payments. The decree applies to all production sharing contracts as defined in section 18 of the decree.

Download