Powers and Delegation in Petroleum Licensing and Regulation
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Questions and Answers

Which agency is responsible for the establishment of the Nigerian Midstream and Downstream Petroleum Regulatory Authority?

  • The Commission
  • The Authority (correct)
  • The Special Investigation Unit
  • The Nigerian National Petroleum Company Limited

Which entity is responsible for the management of petroleum resources?

  • The Authority
  • The Nigerian National Petroleum Company Limited
  • The Special Investigation Unit
  • The Commission (correct)

What is the purpose of the Special Investigation Unit?

  • To investigate and prosecute offenses under the Act (correct)
  • To conduct audits of NNPC Limited
  • To establish incorporated joint venture companies
  • To manage petroleum resources

What is the purpose of the Nigerian National Petroleum Company Limited?

<p>To manage petroleum resources (C)</p> Signup and view all the answers

Which type of license is required for midstream and downstream gas operations?

<p>Gas transportation pipeline license (A)</p> Signup and view all the answers

What are the general duties of a gas distributor?

<p>Providing service to customers (D)</p> Signup and view all the answers

What is the purpose of the gas network code?

<p>Facilitating access to gas operations (B)</p> Signup and view all the answers

Which of the following is NOT a responsibility of the Petroleum Industry/let?

<p>Managing petroleum reserves and installations (A)</p> Signup and view all the answers

What does the Petroleum Industry/let keep public registers of?

<p>Licenses and leases granted by the Minister (A)</p> Signup and view all the answers

What is one of the areas where the Petroleum Industry/let sets and enforces approved standards and regulations?

<p>Natural gas flaring and venting (A)</p> Signup and view all the answers

Which type of license is required for midstream and downstream petroleum liquids operations?

<p>Bulk petroleum liquids storage license (D)</p> Signup and view all the answers

Which type of license is required for the construction and operation of a facility for the production of petrochemicals?

<p>License to construct and operate a facility for retail supply and distribution of petroleum products (C)</p> Signup and view all the answers

What is the purpose of the host communities development trust in the petroleum industry?

<p>To manage the distribution of trust funds to host communities (C)</p> Signup and view all the answers

What is the main objective of the petroleum industry fiscal framework?

<p>To establish pricing principles for petroleum products (D)</p> Signup and view all the answers

Under what circumstances can the Minister order a cutback of crude oil or condensate production?

<p>During a national emergency (C)</p> Signup and view all the answers

What is the charge of hydrocarbon tax based on?

<p>Crude oil revenue (A)</p> Signup and view all the answers

Which entity is responsible for the technical and commercial regulation of upstream petroleum operations?

<p>The Nigerian Upstream Petroleum Regulatory Commission (B)</p> Signup and view all the answers

What are the objectives of the Nigerian Upstream Petroleum Regulatory Commission?

<p>To implement government policies for upstream petroleum operations (B)</p> Signup and view all the answers

According to the Petroleum Industry Act, what is the objective of creating efficient and effective governing institutions in the petroleum industry?

<p>To promote transparency and accountability (D)</p> Signup and view all the answers

What are the functions of the Commission in relation to upstream petroleum operations?

<p>To enforce, administer, and implement laws, regulations, and policies (B)</p> Signup and view all the answers

What is the role of the Minister of Petroleum according to the Petroleum Industry Act?

<p>All of the above (D)</p> Signup and view all the answers

According to the Petroleum Industry Act, who is the property and ownership of petroleum within Nigeria vested in?

<p>The Government of the Federation of Nigeria (D)</p> Signup and view all the answers

What is one of the objectives of the Petroleum Industry Act in relation to local content practice?

<p>To deepen local content practice in the oil and gas industry (A)</p> Signup and view all the answers

Which entity is responsible for the technical regulatory functions of the Nigerian petroleum industry?

<p>The Nigerian Upstream Regulatory Commission (B)</p> Signup and view all the answers

Who is responsible for the appointment and removal of members of the Board of the Nigerian Upstream Regulatory Commission?

<p>The President of Nigeria (D)</p> Signup and view all the answers

What is the main objective of the Nigerian Upstream Regulatory Commission?

<p>To regulate the technical aspects of the petroleum industry (D)</p> Signup and view all the answers

Which of the following tax rates was in effect during the period of July 1974 to March 1974?

<p>55% (D)</p> Signup and view all the answers

What was the royalty rate for offshore crude oil up to 100m water depth during the period of April 1977 to March 1974?

<p>18.5% (D)</p> Signup and view all the answers

What was the royalty rate for offshore crude oil during the period of April 1975 to March 1974?

<p>16.67% (A)</p> Signup and view all the answers

Which of the following is true about hydrocarbons with a high carbon to hydrogen ratio?

<p>They are unsaturated (D)</p> Signup and view all the answers

Which of the following is NOT a characteristic of hydrocarbons with a low carbon to hydrogen ratio?

<p>They have a pleasant odor (B)</p> Signup and view all the answers

Which of the following fiscal options does the PIA offer to investors?

<p>Cost based incentives based on percentage of capital investments (A)</p> Signup and view all the answers

According to the Petroleum Industry Act, what is the royalty rate for shallow water oil production?

<p>12% (D)</p> Signup and view all the answers

What is the production allowance for onshore shallow converted acreages under the Petroleum Industry Act?

<p>NHT: 30% (A)</p> Signup and view all the answers

What is the royalty rate for deep offshore gas production under the Petroleum Industry Act?

<p>8% (C)</p> Signup and view all the answers

What is the percentage of revenue for profit share to contractor under the Petroleum Industry Act?

<p>16.5% (B)</p> Signup and view all the answers

According to the text, what was the rate of dividend WHT reduced to?

<p>10% (B)</p> Signup and view all the answers

According to the text, what was the rate of CITA reduced to?

<p>30% (B)</p> Signup and view all the answers

According to the text, what was the minimum royalty rate for offshore fields beyond 1000m water depth?

<p>8% (A)</p> Signup and view all the answers

According to the text, what was the increasing rate of ITC for deepwater PSCs under the old fiscal regime?

<p>50% (A)</p> Signup and view all the answers

According to the Petroleum Industry Act, what is the fiscal terms for new development investments based on?

<p>A cost/price ratio of 45% (A)</p> Signup and view all the answers

What is the purpose of the Dual Tax and Royalty by Price system in the Petroleum Industry Act?

<p>To increase the Saving Index (C)</p> Signup and view all the answers

What is the maximum cost capping ratio set by the Petroleum Industry Act for annual revenues?

<p>65% (D)</p> Signup and view all the answers

What type of license is required for midstream and downstream gas operations according to the Petroleum Industry Act?

<p>Gas Distribution License (C)</p> Signup and view all the answers

Which of the following fiscal tools is NOT mentioned in the text?

<p>Investment Tax Allowances (A)</p> Signup and view all the answers

Which type of fiscal agreement allows an IOC to own equity?

<p>Production Sharing Contract (PSC) (D)</p> Signup and view all the answers

What is the primary advantage of the Royalty/Tax regime compared to the PSC regime?

<p>Higher % of resource can be booked (A)</p> Signup and view all the answers

Which entity is responsible for the technical and commercial regulation of upstream petroleum operations?

<p>Nigerian Upstream Regulatory Commission (B)</p> Signup and view all the answers

Which of the following is NOT a key element of administration redefined in the Petroleum Industry Act?

<p>Significant crude oil or gas discovery (C)</p> Signup and view all the answers

What is the duration of a Petroleum Exploration License?

<p>3 years (C)</p> Signup and view all the answers

Which of the following is NOT a stage in the petroleum licensing regime?

<p>Decommission &amp; Abandon (B)</p> Signup and view all the answers

What is the duration of a Petroleum Mining Lease?

<p>15 years (C)</p> Signup and view all the answers

According to the Petroleum Industry Act, what is the key issue related to the administration of revoked producing leases?

<p>Interim operator appointment within 30 days (B)</p> Signup and view all the answers

What is the period of service fee basis for the interim operator of revoked producing leases?

<p>To be determined by the Commission (C)</p> Signup and view all the answers

What happens to the exploration cost of revoked producing leases?

<p>Cost is not borne (C)</p> Signup and view all the answers

Under the Conversion Contract Regime, what happens to the fiscal incentives provided under PPTA?

<p>They are terminated (C)</p> Signup and view all the answers

According to the text, how long is the duration of a Petroleum Prospecting License for onshore and shallow water areas?

<p>6 years (C)</p> Signup and view all the answers

What is the duration of a Petroleum Exploration License?

<p>3 years (D)</p> Signup and view all the answers

According to the text, how long is the duration of a Petroleum Mining Lease for all terrains?

<p>20 years (C)</p> Signup and view all the answers

What is the duration of a Petroleum Prospecting License for deep offshore and frontier areas?

<p>12 years (C)</p> Signup and view all the answers

Which of the following is a requirement for obtaining a Petroleum Prospecting License?

<p>Drilling a minimum of one exploration well (D)</p> Signup and view all the answers

What is the duration of a Petroleum Mining Lease for all terrains?

<p>20 years (D)</p> Signup and view all the answers

Which of the following is a condition for the grant of an appraisal for a significant gas discovery?

<p>Request for appraisal must be submitted within one year of the discovery (C)</p> Signup and view all the answers

Under what circumstances can a Petroleum License be revoked?

<p>All of the above (D)</p> Signup and view all the answers

According to the text, what is the funding mechanism for the Frontier Exploration Fund?

<p>30% of NNPC Limited's profit oil and profit gas (D)</p> Signup and view all the answers

What is the objective of the Midstream and Downstream Gas Infrastructure Fund?

<p>All of the above (D)</p> Signup and view all the answers

According to the text, what is the funding mechanism for the Midstream and Downstream Gas Infrastructure Fund?

<p>0.5% of the wholesale price of petroleum products and natural gas sold in Nigeria (B)</p> Signup and view all the answers

What is the purpose of the Environmental Remediation Fund?

<p>To rehabilitate or manage negative environmental impacts (D)</p> Signup and view all the answers

According to the text, which of the following is NOT an activity requiring a license in the midstream and downstream gas sector?

<p>Retail trading of gas (C)</p> Signup and view all the answers

According to the text, which of the following is NOT an activity requiring a license in the midstream and downstream liquids sector?

<p>Operation of a transportation network (A)</p> Signup and view all the answers

According to the text, which of the following is NOT a consideration for the Domestic Gas Delivery Obligation (DGDO) and Domestic Crude Supply Obligation (DCSO)?

<p>No export projects for non-compliance (A)</p> Signup and view all the answers

According to the text, which of the following is NOT a principle for gas pricing under the Petroleum Industry Act?

<p>Customer service codes (A)</p> Signup and view all the answers

Which organization is responsible for setting general industry policy direction and supervision on behalf of the government?

<p>Minister of Petroleum (D)</p> Signup and view all the answers

What is the purpose of the NCDMB (Nigeria Content Development and Monitoring Board)?

<p>Local content custodian (D)</p> Signup and view all the answers

Which of the following is NOT an element of institutional control in the petroleum industry?

<p>Reporting relationships (A)</p> Signup and view all the answers

Which regulatory body is responsible for promoting investments and opportunities in the midstream and downstream sectors of the petroleum industry?

<p>The Authority (D)</p> Signup and view all the answers

What is the composition of the Board of the Nigeria Upstream Petroleum Regulatory Commission?

<p>3 Executives and 6 Non-Executives (D)</p> Signup and view all the answers

What is the funding mechanism for the Authority under the Petroleum Industry Act?

<p>0.5% of the wholesale price of petroleum products sold in Nigeria (B)</p> Signup and view all the answers

What is the duration of a Petroleum Mining Lease for all terrains?

<p>20 years (A)</p> Signup and view all the answers

Which agency is responsible for carrying out petroleum operations on a commercial basis, comparable to private companies in Nigeria?

<p>NNPC Limited (B)</p> Signup and view all the answers

What is the primary objective of NNPC Limited as Federation Asset Manager?

<p>To manage production sharing contracts for a fee (C)</p> Signup and view all the answers

What is the main purpose of the bicameral regulatory system across the oil and gas value chain?

<p>To regulate technical and commercial aspects in a vertically integrated manner (D)</p> Signup and view all the answers

What is the significance of the change of nomenclature from 'Oil' to 'Petroleum' in the licensing name?

<p>It signifies Nigeria's commitment to the exploration and production of both oil and gas resources (B)</p> Signup and view all the answers

Which of the following principles is NOT one of the guiding principles of the Petroleum Industry Act?

<p>Transparency (B)</p> Signup and view all the answers

What is the purpose of the Petroleum Industry Act?

<p>To promote crude oil exploration and production for the benefit of Nigerians (B)</p> Signup and view all the answers

Which activities does the Petroleum Industry Act apply to?

<p>All activities within the oil and gas industry (C)</p> Signup and view all the answers

Which of the following actions can lead to the revocation of a license or interest in the petroleum industry?

<p>Non-compliance with applicable laws, regulations and the conditions of the license (D)</p> Signup and view all the answers

What is the minimum percentage of relinquishment required for a New Petroleum Prospecting License and Petroleum Mining Lease after 10 years into its life?

<p>50% (B)</p> Signup and view all the answers

Which of the following is NOT a requirement for obtaining a license or lease in the petroleum industry?

<p>Minimum acreage (C)</p> Signup and view all the answers

What happens if the Minister does not act on the Commission's recommendation to award a license within 90 days?

<p>The license is automatically awarded (D)</p> Signup and view all the answers

Which of the following is a requirement for the renewal of leases and licenses according to the text?

<p>Payment of royalties, rents, taxes, and fees (C)</p> Signup and view all the answers

What is the time frame for submitting a field development plan for a marginal field?

<p>Within three years of the effective date (D)</p> Signup and view all the answers

What is the consequence of failure to submit a field development plan for a marginal field within the specified time frame?

<p>Relinquishment of the marginal field (C)</p> Signup and view all the answers

What is the purpose of unitization in the petroleum industry?

<p>To ensure efficient production and maximize economic recovery (A)</p> Signup and view all the answers

According to the PIA, what is the timeframe for submitting an environmental management plan for upstream petroleum operations?

<p>Within six months of the applicable License or Lease being granted (B)</p> Signup and view all the answers

Which regulatory body is responsible for managing and administering the midstream and downstream segments of the Nigerian oil and gas industry?

<p>The Nigerian Midstream and Downstream Petroleum Regulatory Authority (B)</p> Signup and view all the answers

What is the purpose of the decommissioning and abandonment fund established by the PIA?

<p>To cover the cost of decommissioning and abandonment activities (D)</p> Signup and view all the answers

What is the purpose of the Domestic Crude Supply Obligation (DCSO)?

<p>To guarantee feedstock supply to local refineries (A)</p> Signup and view all the answers

What does the Authority require in order to establish third party access to transportation and distribution facilities?

<p>Detailed rules developed by the Commission and Authority (C)</p> Signup and view all the answers

Under what circumstances may gas flaring be permitted according to the PIA?

<p>All of the above (D)</p> Signup and view all the answers

What is the basis for determining the price of gas calculated by the domestic gas aggregator?

<p>Prices determined by the Authority (B)</p> Signup and view all the answers

What is the purpose of the Domestic Gas Delivery Obligation (DGDO) under the PIA?

<p>To promote gas development for domestic utilization (B)</p> Signup and view all the answers

Which fund is responsible for the development of frontier acreages in Nigeria?

<p>Frontier Exploration Fund (A)</p> Signup and view all the answers

What is the funding mechanism for the Midstream and Downstream Gas Infrastructure Fund?

<p>0.5% of the wholesale price of petroleum products and natural gas sold in Nigeria (C)</p> Signup and view all the answers

Who is responsible for overseeing the control and direction of the Frontier Exploration Fund?

<p>NNPC Limited (B)</p> Signup and view all the answers

What is the objective of the Midstream and Downstream Gas Infrastructure Fund?

<p>All of the above (D)</p> Signup and view all the answers

Which entity is responsible for the technical and commercial regulation of upstream petroleum operations in Nigeria?

<p>Nigerian Upstream Regulatory Commission (A)</p> Signup and view all the answers

What are the three types of licenses/leases introduced by the Petroleum Industry Act (PIA) for upstream petroleum operations?

<p>Petroleum Exploration License (PEL), Petroleum Prospecting License (PPL), Petroleum Mining Lease (PML) (D)</p> Signup and view all the answers

What is the duration of a Petroleum Prospecting License (PPL) for onshore and shallow water areas?

<p>5 years with the prospect of renewal for an additional 5 years (B)</p> Signup and view all the answers

What is the minimum duration of a Petroleum Mining Lease (PML) for all terrains?

<p>20 years (A)</p> Signup and view all the answers

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