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Transcript of Japanese j venture
Playing to your strengthsCapturing the CNG and LPG market in Nigeria 22 August, 2013
www.pinnacleaquasystems.com
PwC
This presentation covers ......
1. Overview
of the local
content Act/PIB
2. Business
opportunity/Challenge
3. The way forward
1Overview of the Local Content Act/PIB
PwC
Overview of the Local Content Act
• Signed into law - 22 April 2010
• Local content also coming up in other areas (Cabotage, PIB etc)
• Key objectives are:- Local capacity & job creation- Technology transfer - Economic independence
• The Act defines Nigerian content as:
“the quantum of composite value added to or created in the Nigerian economy by a systematic development of capacity and capabilities through the deliberate utilization of Nigerian human, material resources and services in the Nigerian oil and gas industry” 4
PwC
Overview of the Local Content ActThe journey so far
• NCDMB playing a key role
• Nigerian Oil & Gas Industry Content Joint Qualification System (NOGIC JQS) was established to consolidate data on stakeholders activities in the Industry
• NCDMB-Nigerian Content Development and Monitoring Board
• http://www.ncdmb.gov.ng/
5
PwC
Business structuring considerationslocal content incentives
Potential incentives and planning opportunities include: Income tax relief/pioneer status Gas utilisation incentives Establishment in a tax free zone Import duty waiver / TIP VAT exemption Investment allowance Tax free dividend Potential ITF refund claim R&D incentives
6
PwC
Overview of the Petroleum Industry Bill
• The Petroleum Industry Bill is a new and unified legal framework for the re-organization and operation of the Nigerian Petroleum Industry.
• This bill is therefore expected to:• (a). Guarantee the uninterrupted flow of the Nigerian oil
and gas with a view to restoring, recapturing and creating investor confidence in the industry.
• (b). Address or redress the issues that gave birth to current challenges in the Niger Delta.
7
2Business opportunity and Challenges
PwC
Manufacturing is way under-developed ...
Source : UNCTAD report to Nigeria 2009
Oil
dom
inat
ed
Sect
oria
l out
put
shar
e (%
)
Milli
ons U
SD m
anuf
actu
ring
outp
ut
MAN/NEMT/2012
PwC
Business Opportunity in LPG
• Trucking
10
PwC
Business Opportunity in LPG
• Gas dispensing station + Cooking gas accessories
11
PwC
Business Opportunity in LPG
• Jetty + Tank Farm
12
PwC
Business Opportunity in LPG
• Signing Off take agreement with LNG
13
PwC
Business Opportunity in LPG
• Acquisition of marginal field• Divestment
14
PwC
Business Opportunity in CNG
• Vehicles (Trucks)• Industries
15
PwC
What is Government saying ? The Eko Gas Scheme would promote the safe use of LPG and is targeted at the low income earners who are of the erroneous impression that LPG is expensive.
The scheme is expected to enable about one million people who use firewood and kerosene for cooking to switch over to LPG (cooking gas) in the next five years.
The Lagos State Government would also be bearing 20% of the cost of cylinders in order to encourage Lagos residents use LPG.
16
3The way forward
PwC
The way forward
• The key aim of the Local Content Act is to improve participation by Nigerians in the oil and gas industry but there is a risk of focus on form rather than “substance”
• Notwithstanding the potential challenges, the Local Content Act holds great opportunities for the future
• There has been series of hearing on the Petroleum Industry Bill by the National Assembly when the final amendment is adopted and passed into law it will cause a strong impact on the industry.
18
“Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage”
Niccolo Machiavelli (1946–1527), Italian Philosopher
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Pinnacle Aqua system Limited, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2012 Pinnacle Aqua system Limited. All rights reserved. In this document, “Pinnacle” and “Pinnacle Aqua system Limited” refer to Pinnacle Aqua system which is a member firm of Manufacturers Association of Nigeria, Port Harcourt Chamber of Commerce, Agriculture ,Mines and Industry and also a registered with the Corporate Affairs Commission of Nigeria as a legal entity.
Thank you …This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Pinnacle Aqua system Limited, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2012 Pinnacle Aqua system Limited. All rights reserved. In this document, “Pinnacle” and “Pinnacle Aqua system Limited” refer to Pinnacle Aqua system which is a member firm of Manufacturers Association of Nigeria, Port Harcourt Chamber of Commerce, Agriculture ,Mines and Industry and also a registered with the Corporate Affairs Commission of Nigeria as a legal entity.