Section 93

(1) The following incentives shall apply to a company engaged in the Incentives
utilisation of associated gas – for
utilisation of
(a) investment required to separate crude oil and gas from the reservoir
associated
into usable products shall be considered as part of the oil field development;
gas
(b) capital investment on facilities or equipment to deliver associated gas
A 448 2025 No. 7 Nigeria Tax Act, 2025
in usable form at utilisation or designated custody transfer points shall be
treated for tax purposes, as part of the capital investment for oil development;
(c) capital allowances, operating expenses and basis of tax assessment
shall be subject to the provisions of this part and the tax incentives under the
revised memorandum of understanding.
(2) The incentives specified under subsection (1) shall be subject to the
following conditions –
(a) condensates extracted and re-injected into the crude oil stream shall
be treated as oil, but those not re-injected shall be treated under existing tax
arrangement;
(b) the company shall pay the minimum amount charged by the Minister
of Petroleum Resources for any gas flared by the company;
(c) the company shall, as far as practicable, keep the expenses incurred
in the utilisation of associated gas separate from those incurred on crude oil
operation and expenses that cannot be separated shall be allowable against
the crude oil income of the company under this Act;
(d) expenses identified as incurred exclusively in the utilisation of
associated gas shall be regarded as gas expenses and be allowable against
the gas income and profit to be taxed under Chapter Two of this Act;
(e) companies which invest in natural gas liquid extraction facilities to
supply gas in usable form to downstream projects, including aluminium smelter
and methanol, Methyl Tertiary Butyl Ether and other associated gas utilisation
projects shall benefit from the incentives;
(f) all capital investments relating to the gas-to-liquids facilities shall be
treated as chargeable capital allowance and recovered against the crude oil
income; and
(g) gas transferred from the natural gas liquid facility to the gas-to-liquid
facilities shall be at zero per cent tax and zero per cent royalty.
(3) Where a company has enjoyed any incentive under this section, the
company shall not claim similar incentive under any law in Nigeria regarding
the same investment or project, including economic development tax incentive
and gas pipeline investment incentive under section 80 of this Act.