Section 93 Nigeria Tax Act 2025

Section 93 of the Nigeria Tax Act 2025 is about Incentives for utilisation of associated gas. It provides as follows:

(1) The following incentives shall apply to a company engaged in the utilisation of associated gas –
(a) investment required to separate crude oil and gas from the reservoir into usable products shall be considered as part of the oil field development;

(b) capital investment on facilities or equipment to deliver associated gas in usable form at utilisation or designated custody transfer points shall be
treated for tax purposes, as part of the capital investment for oil development;

(c) capital allowances, operating expenses and basis of tax assessment shall be subject to the provisions of this part and the tax incentives under the revised memorandum of understanding.

(2) The incentives specified under subsection (1) shall be subject to the
following conditions –
(a) condensates extracted and re-injected into the crude oil stream shall be treated as oil, but those not re-injected shall be treated under existing tax
arrangement;

(b) the company shall pay the minimum amount charged by the Minister
of Petroleum Resources for any gas flared by the company;

(c) the company shall, as far as practicable, keep the expenses incurred
in the utilisation of associated gas separate from those incurred on crude oil operation and expenses that cannot be separated shall be allowable against
the crude oil income of the company under this Act;

(d) expenses identified as incurred exclusively in the utilisation of associated gas shall be regarded as gas expenses and be allowable against the gas income and profit to be taxed under Chapter Two of this Act;

(e) companies which invest in natural gas liquid extraction facilities to supply gas in usable form to downstream projects, including aluminium smelter and methanol, Methyl Tertiary Butyl Ether and other associated gas utilisation
projects shall benefit from the incentives;

(f) all capital investments relating to the gas-to-liquids facilities shall be treated as chargeable capital allowance and recovered against the crude oil income; and
(g) gas transferred from the natural gas liquid facility to the gas-to-liquid
facilities shall be at zero per cent tax and zero per cent royalty.

(3) Where a company has enjoyed any incentive under this section, the company shall not claim similar incentive under any law in Nigeria regarding the same investment or project, including economic development tax incentive and gas pipeline investment incentive under section 80 of this Act.

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