In Nigeria, there are a lot of Oil and Gas companies that provide goods and services in Oil and Gas industry in Nigeria. For a body (corporate) to successfully undertake to do business in the oil and gas industry, there are certain permits, licence for contractors, consultants and service providers that must be required to start such business different from the other types of business. DPR and NIPEX permits are examples of these permit amongst many more.
What is the meaning of these permits DPR and NIPEX?
DPR: (Department of Petroleum Resources) in Nigeria is a government authorized body that regulates compliance with petroleum laws, regulations and guidelines in the oil and gas industry in Nigeria. This involves monitoring of operations at drilling sites, producing wells, production platforms and flow stations, crude oil export terminals, refineries, storage depots, pump stations, retail outlets, any other locations where petroleum is either stored or sold and all pipelines carrying crude oil etc. For a company to render oil and gas services in Nigeria it must get the DPR PERMIT which is applied for under the Oil and Gas Industry Service Permits.
There are three (3) categories of this permit which individually have fees attached to them for application of the licence to be issued. These are:
- The general permits: These types of permits do not require specialized or certified competencies. The applicant is allowed to deliver minor goods and services such as mining, plumbing, minor mechanical maintenance materials etc. The application fee for this category cost 5,000 Naira.
- The Major category: applicants for permits in this category are expected to have relevant and verifiable technical and special skills; they deliver majority goods and services in the oil and gas industry such as drainage, offshore scaffolding, drilling etc and the statutory application fee for this category cost 25,000 Naira.
- The specialized category: under this category, the applicants desires to increase their capacity. For permits in this category, applicants are expected to have relevant and verifiable technical and special skills such as offshore pipeline laying and construction, major construction, onshore pipeline laying, drilling and production, dredging, underwater inspection and services etc. The permit application fee is 250,000 Naira.
A company may apply for and obtain permits in more than one category provided it is registered by Corporate Affairs Commission (CAC) and has the appropriate legal status as well as the competencies, capabilities and equipment to carry out the jobs.
It is important to be aware that the DPR permit application requires service charge, inspection and certification.
NIPEX: (Nigeria Petroleum Exchange) is an arm of National Petroleum Investment Management Services (NAPIMS). It is an electronic one-stop transaction centre that improves on value procurement in the oil and gas industry and institutionalizes world-class contracting processes in Nigeria. The electronic contracting platform uses product codes to identify the type of products and services a company will have as an option and whether it is permitted to operate in the Nigerian oil and gas sector.
To register a company, the Department of Petroleum Resources (DPR) regulates the activities and issue licences to companies participating in the oil and gas sector while Nigeria Petroleum Exchange (NIPEX) is a platform where servicing companies can bid and tender for contracts from multinational and national companies. If a company is registered with NIPEX it means the company is registered to do business with all oil companies in Nigeria in its field of expertise.
It is pertinent for companies registering under NIPEX to select the right product code that fits the company services. Where this is competently done, the company will be invited for NIPEX Jobs that the company can competently do.
Who Can Register a Company with DPR & NIPEX for PERMITS?
There are certain professional bodies given the responsibility to register a company such as Members of the Nigeria Bar Association (NBA), Nigeria Environmental society (NSE), Nigerian Port Authority and so many others.
The requirements for NIPEX registration are complex and many. Any company intending to register should contact the NAPIMS for the list of requirements or consult with accredited professionals.
The oil and gas industry service permit is a statutory requirement for Nigerian registered companies seeking to render services in the oil and gas industry. Certificates are given upon completion of this registration process. To set up a business to provide goods or service in the Nigerian Oil and Gas, it is important to register for the DPR and NIPEX Permits which is a prerequisite to enter the industry.
To apply for this permits, one must ensure that the company has been duly incorporated by the Corporate Affairs Commission and obtain tax identification number before applying for any of the permits.
By Winifred Idiaru, An Associate Partner at Resolution Law Firm, Nigeria