RE:RE:From Petrobras London 12/6/19!The Federal Government has disclosed that it has formally exited the JV cash call arrangements and signed an agreement to exit the cash call policy with the major international oil and gas companies operating in Nigeria. The Federal Government of Nigeria has concluded to settle the IOCs with the sum of US$5 billion for the JV cash calls debts it owed between 2010 and 2015. NNPC has moved to enter into agreements with the IOCs with a view to settling the indebtedness over the next five years. The US$5 billion payments will be made in the form of barrels of new crude production in excess of a particular threshold over the next five years. This, in effect, means that the IOCs would not receive any cash but perhaps recover something through NNPC effectively under-lifting its share of crude oil over the next five years. G. Transactions Asset disposals If a company disposes of a capital asset, capital gains accruing from the disposal are subject to tax under the Capital Gains Tax Act 2004 at the rate of 10%. The amount of capital gains is calculated after deducting expenses associated with the disposal of the assets. A company may claim rollover relief, and therefore postpone the tax liability, if the proceeds from the disposal are used to acquire an asset similar in nature to the one disposed of. Farm-in and farmout The Nigerian Petroleum (Amendment) Decree 1996 (Decree No. 23) provides that “farmout” means “an agreement between the holder of an oil mining lease and a third party which permits the third party to explore, prospect, win, work and carry away any petroleum encountered in a specified area during the validity of the lease.” Farming in is, therefore, a way of acquiring a license interest, and, conversely, farming out is a way of disposing of a license interest while allowing the farmor to benefit from income generated from the farmee’s activities within the area that has been farmed out. The terms “license interest” and “concession interest” are used in this chapter to include the bundle of rights owned by a participant in an oil or gas JV. Selling shares in a company The sale of shares does not attract capital gains tax (CGT) for resident and nonresident shareholders. A minimal stamp duty applies to the share transfer of documents. It is important to note that sales of interests in assets attract CGT. The consent of the Minister of Petroleum Resources is required for the transfer of interest in licenses and controlling shares in an oil and gas c