Oil and gas – NBC Institute

ATAX – May 2019 – L3 – Q7a – Taxation of Specialized Businesses

Provide a report on fiscal incentives in Nigeria’s oil and gas sector, including gas production, exploitation of associated gas, and free trade zone investments.

Question

The Federal Government of Nigeria, in the third quarter of 2018, announced the discovery of a huge hydro-carbon deposit in the Chad Basin area of Borno State. This information has attracted interest from local and foreign investors in the Nigerian oil and gas sector. One such foreign investor is a Japanese billionaire, Mr. Sun Nagasaki, who has investments in oil and gas operations in the Middle East and Latin America.

Mr. Nagasaki is, however, not familiar with the regulations guiding operations and the incentives available to investors in the oil and gas sub-sector in Nigeria. You have been appointed as a tax consultant by Mr. Nagasaki’s representative in Nigeria.

Required:
a. Draft a report addressed to Mr. Nagasaki explaining the following issues of interest:

i. Fiscal incentives available in the gas production phase (2 Marks)
ii. Six incentives for the encouragement of exploitation and utilization of associated gas for commercial purposes (downstream operations) (3 Marks)
iii. Six incentives and fiscal measures that favour and encourage large investment in oil and gas free trade zones (4 Marks)

Answer

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Tags: Fiscal Incentives, Investment, Nigeria, Oil and gas, Tax Relief
Level: Level 3

Topic: Taxation of Specialized Businesses

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

Question

Green Issues

Oil and Gas Limited is a company involved in the upstream petroleum activities in the Delta Region. The restiveness of the youth in this area of operation was a result of environmental degradation of the region. Your firm has just been appointed as the auditors to the company. During the preliminary planning stage of the audit, you realised that the environmental issues could have an impact on the financial statements.

Required:

(a) Enumerate EIGHT steps you would include in the audit process in order to highlight environmental issues that may be apparent in the client’s business.

(8 Marks)

(b) Identify SEVEN major social issues that an auditor will be concerned with in a company’s social policy report. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Audit Process, Delta Region, Environmental Issues, Financial Impact, Oil and gas, Social Policy Reporting, Social responsibility, Upstream Activities
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2014

ATAX – Nov 2016 – L3 – Q6b – Petroleum Profits Tax (PPT)

Determines assessable profit, chargeable profit, assessable tax, and chargeable tax for Bivenette Petroleum Company Limited.

Question

Bivenette Petroleum Company Limited has been in the oil prospecting business for some years. Extracts from its financial statements for the year ended December 31, 2013 show the following information:

Additional Information:

Petroleum Profits Tax rate: 85%
Interest paid includes N12,000,000 paid to an affiliated company.
Capital allowances agreed at N253,750,000.
Operating costs include N302,000,000 paid to a company for information on oil prospect in Adamawa State.
The company is entitled to an Investment Allowance of N173,000,000.

You are required to:

Determine the Assessable Profit, Chargeable Profit, Assessable Tax, and Chargeable Tax of the company for the relevant Year of Assessment. (11 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assessable Profit, Capital allowances, Chargeable Tax, Investment Allowance, Oil and gas, Petroleum Profits Tax
Level: Level 3

Topic: Petroleum Profits Tax (PPT)

ATAX – Nov 2016 – L3 – Q2a&b – Taxation of Specialized Businesses

Outlines the activities of NPDC and the importance of Oil Mining and Prospecting Leases in Nigeria.

Question

Nigerian National Petroleum Corporation (NNPC) is a major regulatory body in Nigeria’s Oil and Gas sector, executing various functions through its subsidiaries.

Requirements:

a) State any FIVE activities of the Nigerian Petroleum Development Company (NPDC), a subsidiary of NNPC. (5 Marks)

b) State the importance of an Oil Mining Lease and an Oil Prospecting Lease. (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Exploration, NPDC, Oil and gas, Oil Mining Lease, Oil Prospecting Lease, Production
Level: Level 3

Topic: Taxation of Specialized Businesses

AFM – May 2016 – L3 – Q4a – Hedging against financial risk: Non-derivative techniques, Economic environment for multinational

Outline three risk mitigation strategies that a company can adopt to reduce risks affecting profitability.

Question

a) Booms and Bumps Limited has recently been registered as a multinational company dealing in the production and drilling of crude oil in the Oil and Gas industry. Due to uncertainties surrounding the future prospects of the industry, management has hired you as a financial consultant to conduct a risk assessment about the viability of the firm. In the course of the assessment, you constructed a risk register containing various risks that have the potential to affect negatively the profitability of the company.

Required:
Outline THREE basic strategies the management of the company can adopt to mitigate the impact of the risks. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business risk, Oil and gas, Risk Management, Risk Mitigation Strategies
Level: Level 3

AT – May 2017 – L3 – Q5c – Petroleum operations

Explain surface rental and carried interest as revenue streams from petroleum operations in Ghana.

Question

c) Ghana has joined its counterparts as an oil-producing country. Discuss fully the following revenue streams due to Ghana from the exploitation of the resource:

i) Surface Rental (2.5 marks)
ii) Carried Interest (2.5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Carried Interest, Oil and gas, Petroleum taxation, Revenue streams, Surface rental
Level: Level 3

Topic: Petroleum operations
Series: MAY 2017

ATAX – May 2019 – L3 – Q7a – Taxation of Specialized Businesses

Provide a report on fiscal incentives in Nigeria’s oil and gas sector, including gas production, exploitation of associated gas, and free trade zone investments.

Question

Required:
a. Draft a report addressed to Mr. Nagasaki explaining the following issues of interest:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Fiscal Incentives, Investment, Nigeria, Oil and gas, Tax Relief
Level: Level 3

Topic: Taxation of Specialized Businesses

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

Question

Green Issues

Required:

(a) Enumerate EIGHT steps you would include in the audit process in order to highlight environmental issues that may be apparent in the client’s business.

(8 Marks)

(b) Identify SEVEN major social issues that an auditor will be concerned with in a company’s social policy report. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Audit Process, Delta Region, Environmental Issues, Financial Impact, Oil and gas, Social Policy Reporting, Social responsibility, Upstream Activities
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2014

ATAX – Nov 2016 – L3 – Q6b – Petroleum Profits Tax (PPT)

Determines assessable profit, chargeable profit, assessable tax, and chargeable tax for Bivenette Petroleum Company Limited.

Question

Additional Information:

Petroleum Profits Tax rate: 85%
Interest paid includes N12,000,000 paid to an affiliated company.
Capital allowances agreed at N253,750,000.
Operating costs include N302,000,000 paid to a company for information on oil prospect in Adamawa State.
The company is entitled to an Investment Allowance of N173,000,000.

You are required to:

Determine the Assessable Profit, Chargeable Profit, Assessable Tax, and Chargeable Tax of the company for the relevant Year of Assessment. (11 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assessable Profit, Capital allowances, Chargeable Tax, Investment Allowance, Oil and gas, Petroleum Profits Tax
Level: Level 3

Topic: Petroleum Profits Tax (PPT)

ATAX – Nov 2016 – L3 – Q2a&b – Taxation of Specialized Businesses

Outlines the activities of NPDC and the importance of Oil Mining and Prospecting Leases in Nigeria.

Question

Nigerian National Petroleum Corporation (NNPC) is a major regulatory body in Nigeria’s Oil and Gas sector, executing various functions through its subsidiaries.

Requirements:

a) State any FIVE activities of the Nigerian Petroleum Development Company (NPDC), a subsidiary of NNPC. (5 Marks)

b) State the importance of an Oil Mining Lease and an Oil Prospecting Lease. (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Exploration, NPDC, Oil and gas, Oil Mining Lease, Oil Prospecting Lease, Production
Level: Level 3

Topic: Taxation of Specialized Businesses

AFM – May 2016 – L3 – Q4a – Hedging against financial risk: Non-derivative techniques, Economic environment for multinational

Outline three risk mitigation strategies that a company can adopt to reduce risks affecting profitability.

Question

Required:
Outline THREE basic strategies the management of the company can adopt to mitigate the impact of the risks. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business risk, Oil and gas, Risk Management, Risk Mitigation Strategies
Level: Level 3

AT – May 2017 – L3 – Q5c – Petroleum operations

Explain surface rental and carried interest as revenue streams from petroleum operations in Ghana.

Question

c) Ghana has joined its counterparts as an oil-producing country. Discuss fully the following revenue streams due to Ghana from the exploitation of the resource:

i) Surface Rental (2.5 marks)
ii) Carried Interest (2.5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Carried Interest, Oil and gas, Petroleum taxation, Revenue streams, Surface rental
Level: Level 3

Topic: Petroleum operations
Series: MAY 2017

Question Tag: Oil and gas

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ATAX – May 2019 – L3 – Q7a – Taxation of Specialized Businesses

Provide a report on fiscal incentives in Nigeria’s oil and gas sector, including gas production, exploitation of associated gas, and free trade zone investments.

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

ATAX – Nov 2016 – L3 – Q6b – Petroleum Profits Tax (PPT)

Determines assessable profit, chargeable profit, assessable tax, and chargeable tax for Bivenette Petroleum Company Limited.

ATAX – Nov 2016 – L3 – Q2a&b – Taxation of Specialized Businesses

Outlines the activities of NPDC and the importance of Oil Mining and Prospecting Leases in Nigeria.

AFM – May 2016 – L3 – Q4a – Hedging against financial risk: Non-derivative techniques, Economic environment for multinational

Outline three risk mitigation strategies that a company can adopt to reduce risks affecting profitability.

AT – May 2017 – L3 – Q5c – Petroleum operations

Explain surface rental and carried interest as revenue streams from petroleum operations in Ghana.

ATAX – May 2019 – L3 – Q7a – Taxation of Specialized Businesses

Provide a report on fiscal incentives in Nigeria’s oil and gas sector, including gas production, exploitation of associated gas, and free trade zone investments.

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

ATAX – Nov 2016 – L3 – Q6b – Petroleum Profits Tax (PPT)

Determines assessable profit, chargeable profit, assessable tax, and chargeable tax for Bivenette Petroleum Company Limited.

ATAX – Nov 2016 – L3 – Q2a&b – Taxation of Specialized Businesses

Outlines the activities of NPDC and the importance of Oil Mining and Prospecting Leases in Nigeria.

AFM – May 2016 – L3 – Q4a – Hedging against financial risk: Non-derivative techniques, Economic environment for multinational

Outline three risk mitigation strategies that a company can adopt to reduce risks affecting profitability.

AT – May 2017 – L3 – Q5c – Petroleum operations

Explain surface rental and carried interest as revenue streams from petroleum operations in Ghana.

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ATAX – May 2019 – L3 – Q7a – Taxation of Specialized Businesses

Provide a report on fiscal incentives in Nigeria’s oil and gas sector, including gas production, exploitation of associated gas, and free trade zone investments.

You're reporting an error for "ATAX – May 2019 – L3 – Q7a – Taxation of Specialized Businesses"

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

You're reporting an error for "AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits"

ATAX – Nov 2016 – L3 – Q6b – Petroleum Profits Tax (PPT)

Determines assessable profit, chargeable profit, assessable tax, and chargeable tax for Bivenette Petroleum Company Limited.

You're reporting an error for "ATAX – Nov 2016 – L3 – Q6b – Petroleum Profits Tax (PPT)"

ATAX – Nov 2016 – L3 – Q2a&b – Taxation of Specialized Businesses

Outlines the activities of NPDC and the importance of Oil Mining and Prospecting Leases in Nigeria.

You're reporting an error for "ATAX – Nov 2016 – L3 – Q2a&b – Taxation of Specialized Businesses"

AFM – May 2016 – L3 – Q4a – Hedging against financial risk: Non-derivative techniques, Economic environment for multinational

Outline three risk mitigation strategies that a company can adopt to reduce risks affecting profitability.

You're reporting an error for "AFM – May 2016 – L3 – Q4a – Hedging against financial risk: Non-derivative techniques, Economic environment for multinational"

AT – May 2017 – L3 – Q5c – Petroleum operations

Explain surface rental and carried interest as revenue streams from petroleum operations in Ghana.

You're reporting an error for "AT – May 2017 – L3 – Q5c – Petroleum operations"

ATAX – May 2019 – L3 – Q7a – Taxation of Specialized Businesses

Provide a report on fiscal incentives in Nigeria’s oil and gas sector, including gas production, exploitation of associated gas, and free trade zone investments.

You're reporting an error for "ATAX – May 2019 – L3 – Q7a – Taxation of Specialized Businesses"

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

You're reporting an error for "AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits"

ATAX – Nov 2016 – L3 – Q6b – Petroleum Profits Tax (PPT)

Determines assessable profit, chargeable profit, assessable tax, and chargeable tax for Bivenette Petroleum Company Limited.

You're reporting an error for "ATAX – Nov 2016 – L3 – Q6b – Petroleum Profits Tax (PPT)"

ATAX – Nov 2016 – L3 – Q2a&b – Taxation of Specialized Businesses

Outlines the activities of NPDC and the importance of Oil Mining and Prospecting Leases in Nigeria.

You're reporting an error for "ATAX – Nov 2016 – L3 – Q2a&b – Taxation of Specialized Businesses"

AFM – May 2016 – L3 – Q4a – Hedging against financial risk: Non-derivative techniques, Economic environment for multinational

Outline three risk mitigation strategies that a company can adopt to reduce risks affecting profitability.

You're reporting an error for "AFM – May 2016 – L3 – Q4a – Hedging against financial risk: Non-derivative techniques, Economic environment for multinational"

AT – May 2017 – L3 – Q5c – Petroleum operations

Explain surface rental and carried interest as revenue streams from petroleum operations in Ghana.

You're reporting an error for "AT – May 2017 – L3 – Q5c – Petroleum operations"

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