The document discusses opportunities for businesses in Nigeria's compressed natural gas (CNG) and liquefied petroleum gas (LPG) markets. It provides an overview of Nigeria's Local Content Act and Petroleum Industry Bill, which aim to promote local participation and job creation in the oil and gas industry. Several business opportunities are identified, including setting up gas stations, transporting gas, operating tank farms, and acquiring marginal oil fields. The way forward involves leveraging opportunities under the Local Content Act while managing potential challenges as the Petroleum Industry Bill is implemented.

1. www.pinnacleaquasystems.com
Playing to your
strengths
Capturing the CNG and LPG
market in Nigeria
22 August, 2013

2. This presentation covers ......
1.
Overview of
the local
content
Act/PIB
3.
The way
forward
PwC
2.
Business
opportunity/
Challenge

3. Overview of the Local
Content Act/PIB

4. Overview of the Local Content Act
•
Signed into law - 22 April 2010
•
Local content also coming up in other areas (Cabotage, PIB etc)
•
Key objectives are:
-
-
Technology transfer
-
•
Local capacity & job creation
Economic independence
The Act defines Nigerian content as:
“the quantum of composite value added to or created in the
Nigerian economy by a systematic development of capacity and
capabilities through the deliberate utilization of Nigerian human,
material resources and services in the Nigerian oil and gas
industry”
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5. Overview of the Local Content Act
The journey so far
•
NCDMB playing a key role
•
Nigerian Oil & Gas Industry Content Joint Qualification System
(NOGIC JQS) was established to consolidate data on stakeholders
activities in the Industry
•
NCDMB-Nigerian Content Development and Monitoring
Board
•
http://www.ncdmb.gov.ng/
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6. Business structuring considerations
local content incentives
Potential incentives and planning opportunities include:
 Income tax relief/pioneer status
 Gas utilisation incentives
 Establishment in a tax free zone
 Import duty waiver / TIP
 VAT exemption
 Investment allowance
 Tax free dividend
 Potential ITF refund claim
 R&D incentives
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7. Overview of the Petroleum Industry Bill
•
•
The Petroleum Industry Bill is a new and unified legal framework
for the re-organization and operation of the Nigerian Petroleum
Industry.
This bill is therefore expected to:
•
(a). Guarantee the uninterrupted flow of the Nigerian oil and
gas with a view to restoring, recapturing and creating investor
confidence in the industry.
•
(b). Address or redress the issues that gave birth to current
challenges in the Niger Delta.
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8. Business opportunity
and Challenges

9. Sectorial output share
(%)
Millions USD manufacturing
output
Manufacturing is way under-developed ...
Source : UNCTAD report to Nigeria 2009
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MAN/NEMT/2012

10. Business Opportunity in LPG
•
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Trucking
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11. Business Opportunity in LPG
•
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Gas dispensing station + Cooking gas accessories
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12. Business Opportunity in LPG
•
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Jetty + Tank Farm
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13. Business Opportunity in LPG
•
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Signing Off take agreement with LNG
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14. Business Opportunity in LPG
•
Acquisition of marginal field
•
Divestment
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15. Business Opportunity in CNG
•
Vehicles (Trucks)
•
Industries
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16. What is Government saying ?
The Eko Gas Scheme would promote the safe use of LPG and is targeted at the low
income earners who are of the erroneous impression that LPG is expensive.
The scheme is expected to enable about one million people who use firewood and
kerosene for cooking to switch over to LPG (cooking gas) in the next five years.
The Lagos State Government would also be bearing 20% of the cost of cylinders in
order to encourage Lagos residents use LPG
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17. The way forward

18. The way forward
• The key aim of the Local Content Act is to improve participation by
Nigerians in the oil and gas industry but there is a risk of focus on
form rather than “substance”
• Notwithstanding the potential challenges, the Local Content Act holds
great opportunities for the future
• There has been series of hearing on the Petroleum Industry Bill by
the National Assembly when the final amendment is adopted and
passed into law it will cause a strong impact on the industry.
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19. “Entrepreneurs are simply those who
understand that there is little difference
between obstacle and opportunity and are
able to turn both to their advantage”
Niccolo Machiavelli (1946–1527), Italian
Philosopher
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the
information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the
accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Pinnacle Aqua system Limited, its members,
employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act,
in reliance on the information contained in this publication or for any decision based on it.
© 2012 Pinnacle Aqua system Limited. All rights reserved. In this document, “Pinnacle” and “Pinnacle Aqua system Limited” refer to Pinnacle Aqua system
which is a member firm of Manufacturers Association of Nigeria, Port Harcourt Chamber of Commerce, Agriculture ,Mines and Industry and also a registered
with the Corporate Affairs Commission of Nigeria as a legal entity.

20. Thank you …
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the
information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the
accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Pinnacle Aqua system Limited, its members,
employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act,
in reliance on the information contained in this publication or for any decision based on it.
© 2012 Pinnacle Aqua system Limited. All rights reserved. In this document, “Pinnacle” and “Pinnacle Aqua system Limited” refer to Pinnacle Aqua system
which is a member firm of Manufacturers Association of Nigeria, Port Harcourt Chamber of Commerce, Agriculture ,Mines and Industry and also a registered
with the Corporate Affairs Commission of Nigeria as a legal entity.