Section 65 Nigeria Tax Act 2025

Section 65 of the Nigeria Tax Act 2025 is about Application of this Part. It provides as follows:

(1) This Part shall apply to companies engaged in upstream petroleum operations in the onshore, shallow water and deep offshore with licences and leases under the Petroleum Industry Act.

(2) In this Part –
(a) hydrocarbon tax shall apply to crude oil as well as field condensates and liquid natural gas liquids derived from associated gas and produced in the field upstream of the measurement points; and

(b) hydrocarbon tax shall not apply to –
(i) associated natural gas, including gaseous natural gas liquids produced in the field and contained in the rich gas, and non-associated natural gas,

(ii) condensates and natural gas liquids produced from non-associated gas in fields or gas processing plants, provided the related volumes are determined at the measurement points or at the exit of the gas processing plant, regardless of whether the condensates or natural gas liquids are subsequently commingled with crude oil, and

(iii) any condensates and natural gas liquids produced from associated gas at gas processing or other facilities downstream of the measurement points.

(3) The costs of production of associated gas, upstream of the measurement point shall be allocated to crude oil for the purposes of calculating hydrocarbon tax, provided that capital and operating costs for wells solely producing associated gas-cap gas shall not be allocated to crude oil, but shall be claimed under Chapter Two of this Act.

(4) This Part shall not apply to a frontier acreage until it is reclassified under section 68 (3) of the Petroleum Industry Act.

(5) For the purposes of determining royalties, condensates shall be treated as crude oil and natural gas liquids as natural gas.

(6) Upstream petroleum operations shall in addition to hydrocarbon tax, be subject to Chapter Two of this Act.

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