Oil Mining Lease – NBC Institute

AT – Nov 2016 – L3 – SB – Q2 – Taxation of Companies

Identify NPDC activities, explain the importance of leases in petroleum operations, and compute adjusted profit, chargeable profit, and chargeable tax.

Question

Nigerian National Petroleum Corporation (NNPC) is one of the regulatory agencies in the Oil and Gas sector of the Nigerian economy. NNPC, through its subsidiaries, carries out various regulatory functions.

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)

c. **Mr. Gillani Azurhi intimated you about his desire to invest in any company engaged in petroleum operations. One of his friends advised him against the petroleum sector in view of the current low price of crude oil in the international market and the high cost of domestic operations. He declined the advice, arguing that the price will not remain at its current low level as Nigeria will not be in recession forever.

On his own, he carried out some research using the internet. He presented you with the following financial extracts of Joji Petroleum Company Limited, which he obtained from the internet:**

Details	Amount (₦’000)
Current year capital allowances	6,080
Previous years’ capital allowances (b/f)	8,901
Custom duty	125
Royalties not included in the accounts	1,638
Loss brought forward	6,250
Petroleum Profits Tax payable	1,336

Assume a tax rate of 85%. You are required to:
i. Compute and explain the significance of Adjusted Profit. (9 Marks)
ii. Compute and explain the significance of Chargeable Profit. (2 Marks)
iii. Compute and explain the significance of Chargeable Tax. (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjusted Profit, Chargeable Profit, Chargeable Tax, NPDC Activities, Oil Mining Lease, Oil Prospecting Lease
Level: Level 3

Topic: Taxation of Companies
Series: NOV 2016

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

AT – May 2018 – L3 – SB – Q2a – Taxation of Specialized Businesses

Differentiate between “disposal” and “disposed of,” and discuss intangible drilling costs and oil mining leases.

Question

“Disposal” or “disposed of” are terminologies used frequently in relation to chargeable oil owned by an oil-producing company under the provisions of the Petroleum Profits Tax Act Cap P.13 LFN 2004.

Required:

(i) Differentiate between “disposal” and “disposed of”. (2 Marks)

(ii) Discuss the following:

Intangible drilling costs. (2 Marks)
Oil mining lease. (1 Mark)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Chargeable Oil, Disposal, Intangible Drilling Costs, Oil Mining Lease, Petroleum Law, Petroleum Profits Tax
Level: Level 3

Topic: Taxation of Specialized Businesses
Series: MAY 2018

AT – Nov 2016 – L3 – SB – Q2 – Taxation of Companies

Identify NPDC activities, explain the importance of leases in petroleum operations, and compute adjusted profit, chargeable profit, and chargeable tax.

Question

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)

On his own, he carried out some research using the internet. He presented you with the following financial extracts of Joji Petroleum Company Limited, which he obtained from the internet:**

Details	Amount (₦’000)
Current year capital allowances	6,080
Previous years’ capital allowances (b/f)	8,901
Custom duty	125
Royalties not included in the accounts	1,638
Loss brought forward	6,250
Petroleum Profits Tax payable	1,336

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjusted Profit, Chargeable Profit, Chargeable Tax, NPDC Activities, Oil Mining Lease, Oil Prospecting Lease
Level: Level 3

Topic: Taxation of Companies
Series: NOV 2016

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

AT – May 2018 – L3 – SB – Q2a – Taxation of Specialized Businesses

Differentiate between “disposal” and “disposed of,” and discuss intangible drilling costs and oil mining leases.

Question

Required:

(i) Differentiate between “disposal” and “disposed of”. (2 Marks)

(ii) Discuss the following:

Intangible drilling costs. (2 Marks)
Oil mining lease. (1 Mark)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Chargeable Oil, Disposal, Intangible Drilling Costs, Oil Mining Lease, Petroleum Law, Petroleum Profits Tax
Level: Level 3

Topic: Taxation of Specialized Businesses
Series: MAY 2018

Question Tag: Oil Mining Lease

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AT – Nov 2016 – L3 – SB – Q2 – Taxation of Companies

Identify NPDC activities, explain the importance of leases in petroleum operations, and compute adjusted profit, chargeable profit, and chargeable tax.

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.

AT – May 2018 – L3 – SB – Q2a – Taxation of Specialized Businesses

Differentiate between “disposal” and “disposed of,” and discuss intangible drilling costs and oil mining leases.

AT – Nov 2016 – L3 – SB – Q2 – Taxation of Companies

Identify NPDC activities, explain the importance of leases in petroleum operations, and compute adjusted profit, chargeable profit, and chargeable tax.

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.

AT – May 2018 – L3 – SB – Q2a – Taxation of Specialized Businesses

Differentiate between “disposal” and “disposed of,” and discuss intangible drilling costs and oil mining leases.

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Question Tag: Oil Mining Lease

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AT – Nov 2016 – L3 – SB – Q2 – Taxation of Companies

Identify NPDC activities, explain the importance of leases in petroleum operations, and compute adjusted profit, chargeable profit, and chargeable tax.

You're reporting an error for "AT – Nov 2016 – L3 – SB – Q2 – Taxation of Companies"

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"

AT – May 2018 – L3 – SB – Q2a – Taxation of Specialized Businesses

Differentiate between “disposal” and “disposed of,” and discuss intangible drilling costs and oil mining leases.

You're reporting an error for "AT – May 2018 – L3 – SB – Q2a – Taxation of Specialized Businesses"

AT – Nov 2016 – L3 – SB – Q2 – Taxation of Companies

Identify NPDC activities, explain the importance of leases in petroleum operations, and compute adjusted profit, chargeable profit, and chargeable tax.

You're reporting an error for "AT – Nov 2016 – L3 – SB – Q2 – Taxation of Companies"

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"

AT – May 2018 – L3 – SB – Q2a – Taxation of Specialized Businesses

Differentiate between “disposal” and “disposed of,” and discuss intangible drilling costs and oil mining leases.

You're reporting an error for "AT – May 2018 – L3 – SB – Q2a – Taxation of Specialized Businesses"

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