20 Jan

OIL AND GAS 2.1A PIPELINES (INTRODUCTION)

OIL AND GAS PIPELINES Oil in situ is worthless and needs to get to the final consumers. After oil is extracted, it needs to be transported to where it can be refined afterwhich it is transported to the market where it can be sold. Oil can be transported through vessels, ships, tankers or pipelines. Pipelines […]

20 Jan

OIL AND GAS 2.1B PIPELINES (GUIDELINES ON CONSTRUCTION)

BRIEF GUIDELINES ON CONSTRUCTING PIPELINES IN NIGERIA A person who desires to construct a pipeline must follow the laid down guidelines. First:: He/she/it must obtain a Permit to Survey (Also referred to as a license to Survey) from the Petroleum Minister: As provided by Section 4 of the Oil Pipelines Act. To get this permit, […]

20 Jan

OIL AND GAS 2.1C PIPELINES (COMMON USAGE, TERMINATION, ETC)

COMMON USAGE: This refers to a situation where two or more parties share an existing pipeline which goes to the same destination. This is NOT prohibited. Provided the conditions for use shall be determined by the parties or by the minister. USE BY THIRD PARTY: Section 18 of the Oil Pipelines Act provides: any person […]

20 Jan

OIL AND GAS 2.1D PIPELINES (ADVANTAGES AND DISADVANTAGES)

ADVANTAGES OF PIPELINE TRANSPORTATION. – It is a more effective and speedy alternative. – Pipelines are comparatively safer than tankers. – It is more economical and cost-effective especially in relation to movement of large volumes. DISADVANTAGES. – Pipelines lack flexibility as their routes and destination cannot be changed except by reconstruction. – Pipelines are cost […]

20 Jan

OIL AND GAS 2.1E PIPELINES (DECOMMISSIONING AND DISPOSAL)

DECOMMISSIONING AND DISPOSAL: the issue of decommissioning arises where a reservoir is depleted. i.e. where the well supplies oil to the pipeline has been exhausted. Decommissioning entails the removal and disposal of obsolete installations. May include plugging wells with cement to protect ground water communication and removal of equipment[1]. Regulation 35 and 45 of the […]

20 Jan

OIL AND GAS 2.2 PETROLEUM REFINERY AND PROCESSING PLANT

PETROLEUM REFINERY AND PROCESSING PLANT. In commercial terms; refining is the process of improving the marketability of petroleum. It may include liquefaction of gas and separating crude oil…[1]Refining essentially involves subjecting the crude oil to a scientific process, which in the end produces products that can be marketed and distributed for our energy needs[2]. For […]

20 Jan

OIL AND GAS 2.3A REVENUE ALLOCATION

REVENUE ALLOCATION. From Section 162 of the 1999 constitution we can see that revenue is any income or return accruing to or derived by the government of the federation from any source. Revenue here is the income accruing from the oil and gas industry to the government. Revenue allocation therefore entails how the government shares […]

20 Jan

OIL AND GAS 2.3B REVENUE SHARING FORMULA

SHARING FORMULA? Having established that the property in oil is vested in the Federal Government. The next question is: How is the Revenue Generated therefrom shared? Well, the answer to this question has never been straightforward. Various commissions and committees have been set-up to determine the sharing formula. We have had; Phillipson Commission (1946), the […]

20 Jan

OIL AND GAS 2.5 PETROLEUM PROFITS

ADMINISTRATION OF PETROLEUM PROFIT. Petroleum is a huge income earner for the government. The Regulation of Petroleum Profits is provided for by the Petroleum Profits Tax Act 1959 which has 11 parts, 63 sections and 3 schedules. The Administration of Petroleum Profit is vested on the FIRS which was established under Section 1 of the […]

20 Jan

OIL AND GAS 2.5 TRANSFER OF PETROLEUM TECHNOLOGY)

TRANSFER OF PETROLEUM TECHNOLOGY. Technology transfer has been defined as the process of sharing skills, knowledge, and methods as regards science and technologies among governments and other institutions[1]. The Local content development is an initiative on the part of the Nigerian government to develop local capacity in the oil and gas industry to enable Nigerians […]