Seventh Schedule: Petroleum royalty
Schedule 7 to the Nigeria Tax Act 2025, as published in the Official Gazette.
Referred to in Sections 73(3), 87(2) and 90(2).
Referred to in Sections 73(3), 87(2) and 90(2).
PART I — ADMINISTRATION OF ROYALTIES
Royalties on petroleum production
1.
(1)
The Service shall administer royalties payable in accordance with the provision of the Nigeria Tax Administration Act.
(2)
All production of petroleum, including production tests is liable to royalty on a non-discriminatory basis, payable by the licensee or lessee.
Royalties to be paid in cash
2. Royalties shall be paid by the licensee or lessee in cash in accordance with the Nigeria Tax Administration Act, based on the fiscal oil price and fiscal gas price determined by the Commission, or realisable price determined in accordance with section 113 of this Act in the case of production sharing contract under Part III of Chapter Three of this Act.
Provision of monthly schedule to the Service
3. The Commission shall provide to the Service a monthly schedule of production and chargeable volume by each company engaged in petroleum operations determined for the field at the measurement points or deemed measurement points, fiscal oil price and fiscal gas price determined for the field at the measurement points, and other relevant information for the determination of royalties.
PART II — DETERMINATION OF CHARGEABLE VOLUMES
AND PRICES FOR ROYALTIES
Measurement Point for the determination of production volumes
4. The measurement of crude oil, condensates, natural gas and natural gas liquids, and the procedures for determining production and chargeable volumes for royalties purposes shall be in accordance with the Seventh Schedule to the Petroleum Industry Act and applicable regulations or guidelines issued by the Commission.
Determination of price for royalty
5. The fiscal oil price applicable to crude oil and condensates, and the fiscal gas price applicable to natural gas and natural gas liquids for the field at the measurement points shall be as determined by the Commission in accordance with the Seventh Schedule to the Petroleum Industry Act and applicable regulations or guidelines issued by the Commission.
PART III — ROYALTIES FOR PART I OF CHAPTER
THREE OF THIS ACT
Determination of royalties for Part I of Chapter Three of this Act
6.
(1)
Royalties payable shall be determined on a monthly basis, in the
(a)
crude oil and condensates, the royalties shall be based on production in accordance with subparagraph (2) of this paragraph and by price in accordance with subparagraph (3) ; and
(b)
natural gas and natural gas liquids, the royalties shall be based on production in accordance with subparagraph (4):
Provided that condensates shall be treated as crude oil and natural gas liquids shall be treated as natural gas for the purpose of this Part. Royalty based on production
(2)
For the purpose of this paragraph —
(a)
royalties based on production shall be calculated on a field basis ;
(b)
the royalty shall be at a rate per centum of the chargeable volume of the crude oil and condensates produced from the field area in the relevant month on terrain basis as follows —
(i)
onshore areas – 15%,
(ii)
shallow water (up to 200m water depth)–12.5%,
(iii)
deep offshore (beyond 200m water depth)–7.5%, and
(iv)
frontier basins–7.5% ;
(c)
for deep offshore fields with a production during a month of not more than 50,000 bopd, the royalty rate shall be 5% and the share of the production above 50,000 bopd shall be at the royalty rate specified in subparagraph
(b)
;
(d)
royalties for onshore fields and shallow water fields, including marginal fields, with crude oil and condensate production not more than 10,000 bopd during a month shall be at a rate per centum of the chargeable volume of the crude oil and condensates produced from the field area per production day during a month on tranched basis as follows —
(i)
for the first 5,000 bopd — 5%, and
(ii)
for the next 5,000 bopd, for the share of production over 5,000 bop - 7.5%:
Provided that for fields with crude oil and condensate production more than 10,000 bopd during a month, the share of the production over 10,000 bopd during a month shall be at the royalty rates specified under subparagraph (b).
(e)
with respect to subparagraphs (c) and (d), where a single field covers two or more petroleum mining leases, the royalty shall be determined based on the total production from the field ;
(f)
royalty based on production for natural gas and natural gas liquids shall be at a rate of 5% of the chargeable volume and royalty rate for natural gas produced and utilised in-country shall be 2.5% of the chargeable volume ; and
(g)
where a field is located partially in onshore and in shallow water or partially in shallow water and deep offshore areas, the weighted average royalty shall be calculated in accordance with regulations. Royalty by price
(3)
There shall be payable, in addition to the royalty set out in subparagraph
(2)
of this paragraph for onshore, shallow water and deep offshore —
(a)
a royalty by price with respect to crude oil and condensates at the rates set out below —
(i)
below US $50 per barrel – 0%,
(ii)
at US $100 per barrel – 5%,
(iii)
at US $150 per barrel and above – 10%, and
(iv)
between US $50 and US $100 per barrel and between US $100 and US $150 per barrel, the royalty by price shall be determined based on linear interpolation, as an example, if in 2020 the price is US $75 per barrel, the royalty by price shall be 2.5%, and the price levels mentioned in subparagraphs (i), (ii), (iii) and (iv) shall apply to the year 2020, and at the beginning of 2021 and of each succeeding calendar year these price levels shall be increased by 2% relative to the values of the previous year ;
(b)
there shall be no royalty by price for frontier acreages ; and
(c)
royalty derived from "royalty by price" shall be for the credit of the Nigerian Sovereign Investment Authority.
PART IV— DETERMINATION OF ROYALTIES FOR PART II AND
III OF CHAPTER THREE OF THIS ACT
Royalty based on production
7.
(1)
Subject to subparagraph (2) of this paragraph, royalties payable shall be determined on a monthly basis, which shall be at a rate per centum of the chargeable value of the crude oil and casing head petroleum spirit produced from the relevant area in the relevant period as follows —
(a)
onshore areas– 20%;
(b)
offshore areas up to 100 metres water depth – 18.5%;
(c)
offshore areas above 100 up to 200 metres water depth – 16.5%;
(d)
offshore areas beyond 200 metres water depth – 10%;
(e)
frontier basin – 7.5% ; and
(f)
inland basin – 7.5%. Royalty for Onshore and shallow Offshore Production Sharing Contracts
(2)
The following royalties for onshore and shallow offshore production sharing contracts shall be applicable —
(a)
Onshore —
(i)
for production below 2 thousand barrels of oil per day – 5.0%,
(ii)
for production between 2 and 5 thousand barrels of oil per day – 7.5%,
(iii)
for production between 5 and 10 thousand barrels of oil per day – 15%, and
(iv)
for production above 10 thousand barrels of oil per day– 20%;
(b)
Offshore up to water depth of 100 metres —
(i)
for production below 5 thousand barrels of oil per day – 2.5%,
(ii)
for production between 5 and 10 thousand barrels of oil per day – 7.5%,
(iii)
for production between 10 and 15 thousand barrels of oil per day – 12.5%, and
(iv)
for production above 15 thousand barrels of oil per day – 18.5% ;
(c)
Offshore between water depth of 100 and 200 metres —
(i)
for production below five thousand barrels of oil per day – 1.5%,
(ii)
for production between 5 and 10 thousand barrels of oil per day – 3.0%,
(iii)
for production between 10 and 15 thousand barrels of oil per day – 5%,
(iv)
for production between 15 and 25 thousand barrels of oil per day –10.0%,
(v)
for production above 25 thousand barrels of oil per day – 16.67%. Royalty by price
(3)
Royalty by price is adopted in order to allow for royalty reflexivity based on changing prices of crude oil, condensates and natural gas, and shall be payable in addition to royalty based on production specified in subparagraph
(1)
of this paragraph as follows —
(a)
the royalty based on price shall be identical for the various water depths beyond 200m water depth including frontier acreages for crude oil and condensates ;
(b)
the royalty rates shall be based on increase that exceeds US$20 per barrel, and shall be determined separately for crude oil and condensates as follows —
(i)
from US$ 0 and up to US$ 20 per barrel–0%,
(ii)
above US$ 20 and up to US$ 60 per barrel–2.5%,
(iii)
above US$ 60 and up to US$ 100 per barrel–4%,
(iv)
above US$ 100 and up to US$ 150 per barrel–8%, and
(v)
above US$ 150–10%;
(c)
royalty based on production for natural gas shall be at a rate per centum of the price received by a licensee, lessee or marginal field holder in the relevant area, or at a price not less than the fees prescribed for gas flare penalties in the applicable regulations whichever is greater, but does not include any flare or waste gas appropriated by the Government of the Federation for its own use or for any purpose approved by it, as follows —
(i)
onshore areas–7 percent,
(ii)
offshore areas–5 percent ; and
(d)
all natural gas liquids extracted from natural gas and spiked into the oil stream shall be treated as oil and all natural gas extracted and processed, except volumes flared or utilised for the purpose of oil and gas production operations in the particular field, shall be liable to royalty at a rate per centum of the price received equivalent to the rate prescribed in subparagraph (c) or at a price not less than the fees prescribed for gas flare penalties in the applicable regulations whichever is greater.
All Schedules
- First Schedule
- Second Schedule
- Third Schedule
- Fourth Schedule
- Fifth Schedule
- Sixth Schedule
- Seventh Schedule
- Eighth Schedule
- Ninth Schedule
- Tenth Schedule
- Eleventh Schedule
- Twelfth Schedule
- Thirteenth Schedule
- Fourteenth Schedule
Source: Nigeria Tax Act, 2025 (Act No. 7 of 2025), Official Gazette No. 117, Lagos, 26 June 2025. General information, not tax or legal advice.