The Bill defines Indigenous Petroleum Companies (“IPCs”) as those petroleum companies in which:
- 51% or more of its shares are beneficially owned directly or indirectly by Nigerians (this aligns with the percentage shareholding required under the Nigerian Content Act and is a shift from previous PIB drafts some of which adopted 55% or 60% shareholding);
- Meets the requirements of any guidelines or regulations issued by the Inspectorate or Agency; and
- Is accredited as such by the Agency.
The wording suggests that these three conditions are cumulative. It should be noted however that a company listed on any stock exchange in Nigeria with a majority of Nigerian directors is deemed to qualify as an IPC.
Part VI applies specifically to OPLs/OMLs currently held by IPCs and provides for certain benefits for those IPCs as follows:
- Exclusion of state participation in IPCs with less than twenty five thousand barrels of oil per day aggregate production;
- IPCs with the above stated production level will be allowed to produce up to the technical allowable limit and are therefore not subject any OPEC quota related restrictions;
- Minister to issue regulations/guidelines to increase IPC participation and set targets for:
- indigenous petroleum reserves;
- Production personnel content and measurable parameters for determining level of indigenous participation which shall be subject to periodic review for continuous increase in indigenous participation.
Unlike previous drafts of the Bill, there are no preferential fiscal terms or access to acreage by IPCs.