REQUIREMENTS FOR DOING BUSINESS IN THE NIGERIAN OIL
AND GAS INDUSTRY
Paper Presented at the Sensitisation/Enlightenment Workshop on the
Nigerian Oil and Gas Industry Content Development Act-2010,
at Uyo, Akwa Ibom State
By
Moses O. Kragha
Kragha & Associates ( Mining & Petroleum Consultants)
June 27, 2013
1
Order of Presentation
. Introduction
. Registration with Corporate Affairs and Allied Matters
Commission (CAC)
. Application for DPR annual Permit
. Registration with NCDMB Joint Qualification System (JQS) and
the e-market place, NiPeX.
. Registration with (company) users of Goods and Services.
. Available business opportunities in NC Development.
. Start-small businesses in NC development activity areas.
2
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
1. Introduction
For any body (corporate) to undertake any business in the Nigerian oil
and gas industry it will be required to fulfill the following:
. Register with the Corporate Affairs Commission (CAC)
. Obtain the annual Department of Petroleum Resources (DPR)
Licence (for operators) and/or permit (for contractors, consultants,
services providers).
. Register with the NCDMB Joint Qualification System (JQS) and
Protroleum e-marketplace
. Register with (company) users of goods and services
3
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
2. Registration with CAC:
a) Memorandum and Articles of Association
b) List of subscribers (and directors)
c) Certificate of incorporation or registration, if subscriber is already a
corporate body
d) Tax clearance of subscribers
e) CAC assessed costs and fees (based on size of the shares being
subscribed to
4
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
3. (Application for) DPR Permit (annually)
Application for DPR permit is in accordance to the category of the
activity area(s) being applied for. The DPR has classified the activity
areas into three categories:
• General Purpose Category;
• Major category;
• Specialised category;
in increasing order of complexity and sophistication of technical/
specialized skills.
5
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
Activities in the General Purpose Category are grouped into four sub
categories; three of these are further subdivided into 19 sub groups.
The Major Category has 20 sub divisions, while the Specislised Category
has 9.
(ALL THREE CLASSIFICATIONS OF THE ACTIVITY AREAS
ARE CONTAINED IN THE “DPR GUIDELINES AND
APPLICATION FORM FOR OIL AND GAS INDUSTRY SERVICE
PERMIT” (website: http://www.dprnigeria.com) )
6
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
S/№ DOCUMENT PAGE N/A
1. COMPLETED APPLICATION FORM
2. COPY OF CERTIFICATE OF INCORPORATION
3. COPY OF FORM C.07/CAC 7/CAC 2.3 OR COPIES OF CAC FORMS
7,6,6&2
4. COPY OF COMPANY’S CURRENT TAX CLEARANCE
CERTIFICATE
5. COPY OF A DIRECTOR’S TAX CLEARANCE CERTIFICATE
6. BANK DRAFT DRAWN IN FAVOUR OF FEDERAL GOVERNMENT
OF NIHERIA (DPR FEES ACCOUNT)
7. COPY OF BANK DRAFT
8. COPY OF THE EXPIRED PERMIT
9. COPY OF PHOTO ID OF PERSON HANDLING FOR THE COMPANY
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
GENERAL PURPOSE CATEGORY
NEW OR RENEWAL APPLICATION CHECK -LIST
7
S/№ DOCUMENT PAGE N/A
1. COMPLETED APPLICATION FORM
2. COPY OF CERTIFICATE OF INCORPORATION
3. CERTIFIED TRUE COPY OF MEMORANDUM & ARTICLES OF ASSOCIATION
4. CERTIFIED TRUE COPY OF FORM C,07/CAC2.3/CAC7
5. BANK DRAFT DRAWN IN FAVOUR OF FEDERAL GOVERNMENT OF NIGERIA (DPR
FEES ACCOUNT)
6 COPY OF BANK DRFAY
7. COPY OF CURRENT TAX CLEARANCE CERTIFICCATE
8. VAT CERTIFICATE
9 COMPANY’S PROFILE (BROCHURE)
10 COMPREHENSIVE STAFF LIST AND CURRICULUM VITAE OF KEY STAFF
11. LIST OF EQUIPMENT/FACILITY AVAILABLE TO THE COMPANY
12. CURRENT EXPATRATE QUOTA APPROVAL (WHERE APPLICABLE)
13 UP-DATE OF TRANING PROGRAMME FOR NIGERIAN STAFF
14 REGISTRATION BY RELEVANT PROFESSIONAL BODY
15 COPY OF TECHNICAL AND FINANCIAL AGREEMENT WITH FOREIGN PARTNERS
16 WORKMEN’S COMPENSATION POLICY
17 COMMUNITY AFFAIRS, SAFETY, HEALTH, ENVIRONMENT AND SECURITY POLICY
18 COPY OF MEDICAL RETAINERSHIP AGREEMENT WITH A HOSPITAL OR CLINIC
19 COPY OF PHOTO ID OF PERSON HANDLING FOR THE COMPANY
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY MAJOR OR SPECIALISED CATEGORY
NEW APPLICATION CHECK- LIST
8
S/№ DOCUMENT PAGE N/A
1. COMPLETED APPLICATION FORM
2. COPY OF CURRENT TAX CLEARANCE CERTIFICATE
3. VAT CERTIFICATE
4. BANK DRAFT DRAWN IN FAVOUR OF FEDERAL GOVERNMENT OF
NIGERIA (DPR FEES ACCOUNT)
5. COPY OF BANK DRAFT
6. COPY OF EXPIRED PERMIT
7. COMPREHENSIVE STAFF LIST
8. CURRENT EXPATRIATE QUOTA APPROVAL
9. UP-DATE OF TRAINING PROGRAMME FOR NIGERIAN STAFF
10. REGISTRATION BY RELEVANY PROFESSIONAL BODY
11. ACTIVITIES REPORT FOR 3 PRECEDING YEARS
12. ACCIDENT STATUS REPORT
13. COPY OF MEDICAL RETAINERSHIP AGREEMENT WITH A HOSPITAL
OR CLINIC
14. COPY OF PHOTO ID OF PERSON HANDLING FOR THE COMPANY
MAJOR OR SEPCIALISED CATEGORY RENEWAL APPLICATION CHECK LIST
9
4. Registration with NCDMB Joint Qualification System (JQS) and
the e-marketplace.
• in accordance with Article 55 of NOGICD Act, 2010, the JQS shall be
the industry tool for identifying and selecting current and potential
suppliers for any type of purchases, ranging from simple goods and
services, to supported services and major works.
• The JQS registration shall be the first step to becoming an oil and gas
industry supplier; the next step is for the supplier to complete a pre-
qualification questionnaire.
• Most importantly the JQS; interfacing with the Petroleum e-
marketplace, is the monitoring tool for qualitatively and
quantitatively assessing the performances of both suppliers and buyers
for their Nigerian content development programmes, both in project
execution and over time.
10
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
• The Board’s Petroleum e-marketplace (Article 54 of the Act), provides
a virtual platform to facilitate the transaction required for efficient
delivery of goods and services in the industry.
• When fully operational, it shall replace the multiple pre-
qualification advertorials. Pre-qualified vendors would be obtained
from the e-marketplace database consisting of companies that have
been assessed and prequalified ahead of time by industry.
• The selection of a company to provide a product or offer a service
would be done in three steps of
o Prequalification
o Technical evaluation
o Commercial
• For the award of a contract, a company would be pulled out of the
database and invited to submit its technical bid. If the technical bid is successful
and accepted, it would thereafter be invited to submit its
commercial proposal.
11
Table1. (NCDMB) LIST OF CATEGORY OF THE ACTIVITY AREAS
Catering
Office materials supplies
Estate Management
Advertising, publicity
Materials and procurement
Welding, Fabrication and construction
Engineering
Well drilling services/petroleum technology
Exploration, subsurface, petroleum engineering and seismic
Research & development services
Information systems/information technology/communication services
Health safety and environment
12
Table1. (NCDMB) LIST OF CATEGORY OF THE ACTIVITY AREAS Cont’d
Transportation/Supply/Disposal Services
Marine Operations and Logistics Services
Finance and Insurance
Installation, Hook-up and Commissioning
Inspection, Testing & Certification
Project Management/Consulting Services
Surveying/Positioning Services
Modification and Maintenance
Shipping
NB: THE 3 ITEMS ON TOP OF THE LIST ARE MOSES O
KRAGHA’S INCLUSION, NOT ON NCDMB’s LISTING
13
5. Registration with (Company) Users of Goods and Services
Besides the above-stated registrations individual purchasers of goods and
services would require suppliers to register with them.
Suppliers to such companies may be expected to
• Register with CAC or a recognized certification organization for
foreign vendors.
• Learn more about how to do business with large companies by
attending their conferences, seminars and workshops.
• Understand the company’s business.
• Register online with the company
14
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
6. Available Business opportunities in NC Development
. Developing and sustaining NC afford huge business opportunities to a
large number of Nigerians from all works of life and varied
experiences, given the multiplier effect and spill over into other
industrial and commercial sectors of the economy.
. The spread of opportunities can be gleaned from Table I which lists
the categories of the activity areas.
. Additionally Table 2. shows the categories of the NC business
opportunities and their beneficiaries.
15
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
S/№ Categories of NC business opportunities Beneficiaries
1. First consideration in the award of
contracts and jobs
Local/indigenous contractors with equipment, and
machineries, consultants, service providers,
SUPPLIERS
2. First consideration for the use of Nigerian
made goods and services
Manufacturers, inventors, producers, service
providers, SUPPLIERS
3. First consideration for employment and
training (E and T Plan); transfer
(acquisition) of technology)
Youths, school leavers, graduates, experts seeking
employment opportunities
4. Research and development The Nigerian oil and gas industry, educational
institutions, students, lecturers, researchers
contractors and service provider
5. Establishment of the Joint Qualification
System (JQS)
Contractors, service providers, SUPPLIERS
6 Establishment of the Nigerian Content
Development Fund (NCDF)
Indigenous contractors, service providers,
SUPPLIERS
Table 2: Showing categories of NC business opportunities and beneficiaries
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
16
7. Start-small business in NC Development activity areas
Below is the progressive approach to starting off and growing business in
an activity area in the Nigeria Oil and Gas industry.
. Identify business activity where you have proven competence,
capabilities and capacity to perform well.
. Register your business name or limited liability company with CAC.
. Establish a functional office, with a proper organisational structure.
. Apply and obtain your DPR permit.
. Register with one or two oil and gas company(ies) you want to work
for as a contractor in DPR’s General Purpose Category or as sub-
contractor in DPR’s Major or Specialised Categories.
17
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY
7. Start-small business in NC development activity areas Cont’d
. Scout and bid for jobs in activity area(s) where you have
demonstrable capability and competence .
. Grow and develop a niche in the chosen activity area.
. Form alliances; joint-ventures and partnerships within and across
activity areas.
. DO NOT AT ANY POINT IN TIME BE A JACK OF ALL
TRADE!
18
DOING BUSINES IN NIGERIAN OIL & GAS INDUTRY