Q. What is the Nigerian government’s Indigenous Concession Program (ICP)?
A. Passed in 1990, the purpose of the ICP was to increase participation in the Nigerian oil industry by local oil companies. New rules giving indigenous oil companies preference for the award of oil blocks were established. The Indigenous Oil Companies (Regulations and Fiscal Terms) Bill 2005 (SB04) was passed to clarify the definition of “indigenous oil company,” determining that a majority of shares must be owned by Nigerian citizens and/or their associates.
Q. What has the impact of the ICP been on the Nigerian oil and gas industry?
A. Participation of foreign companies in Nigerian oil and gas is limited by the government to 40 percent.. Foreign partners are required to provide full project financing, but are offered a cost recovery mechanism to compensate for their greater financial risks. However, even after the ICP was passed, indigenous companies still only make up a small portion of the Nigerian oil and gas industry.