OIL AND GAS ACTIVITIES: MOST STUDENTS' CONFUSION

[Searider6449]

If you have ever written an examination on Petroleum Profit Tax (PPT) and you see words like Upstream, Midstream and Downstream Activities; you would actually confuse the first "Stream" for the last.

In my first encounter with PPT as a branch of taxation, I got confused too.

This is what they are:

- Upstream Activities: Searching for potential underground or underwater crude oil and natural gas fields, drilling exploratory wells and operating the wells to bring the crude and natural gas to the surface.

- Midstream Activities: Transportation of crude oil (either by rail, road, barge or pipeline), storage and wholesale of crude oil or refined gas.

- Downstream Activities: Refining of the Crude oil and processing/purifying the raw natural gas, distribution and marketing of the products such as Kerosene, petrol, diesel, lubricants and other petrochemical derived from the processing.

A tax student, seeing the above major sectors, may think downstream sector involves drilling of crude oil from the ground or underwater and upstream sector involves refining and marketing of the crude oil products.

Momodu AU (AAT, ACIFC, ACA, ACTI)

[Maclatunji]

A good one.


Thanks for sharing.