President Bola Ahmed Tinubu is determined to take decisive steps to ensure a conducive business climate and reposition Nigeria as a preferred investment destination for oil and gas sector.
These are words of the Special Adviser to the President on Energy, Olu Arowolo Verheijen, during the Ministerial Press Briefing in Abuja on Friday, adding that Tinubu’s ambitions is to accelerate economic growth and diversify the economy for the benefit of all Nigerians.
To urgently address revenue crisis which is impacting all Nigerians, the Adviser said the President believe Oil and Gas sector have the ability to do so. “However, our current oil and gas production and investment levels falls significantly short of our potential”.
She recalled that since 2016, Nigeria has only accounted for only four percent (4%) of Africa’s total oil and gas investments, despite possessing thirty-eight percent (38%) of the continent’s hydrocarbon reserves. “A society is not rich because of its resources but because of what it does with those resources.
Verheijen said to this end, “President Bola Ahmed Tinubu is determined to reverse this trend and take decisive steps to ensure to a conducive business climate and reposition Nigeria as a preferred investment destination for oil and gas sector”.
Brought Presidential directive to streamline and clarify the scope of the two Regulators in the petroleum sector to provide certainty and create a conducive business environment. “Directed the NSA and Special Adviser on Energy to coordinate enhanced security measures in the Niger Delta.
“Owing to this Directive, the TNP pipeline which had been repeatedly vandalized is now enjoying improved uptime; availability has
practically doubled since these directives were implemented. Translated to increased liquids of over 200,000 barrels/day being transported over last 6 months, increased the availability of NLNG Trains 1-6 from 57% in 2023 to 70% in Q1 2024″.
She further revealed that the President also introduced fiscal incentives to deepen Compressed Natural Gas (CNG) and Liquified Petroleum Gas (LPG) penetration. “These incentives were designed to ease the impact of fuel subsidies on transportation cost and enable the displacement of PMS/Diesel.
“And to contribute to stabilizing the price of cooking gas in the market and support the transition to clean cooking. Following extensive engagements, analysis benchmark, with industry operators and regulators, the President has taken further action to address foundational issues identified in the course of these engagements.
Adding, “Mr President initiated amendment of primary legislation to introduce fiscal incentives, reduce project execution timelines and promote cost efficiency.
However, recognising urgency to accelerate investments to stabilise the economy, the President executed these Policy Directives to clearly signal policy direction of this administration to both the market and regulators.
She mentioned the policy directive which are Fiscal Incentives for Non-Associated Gas (NAG), Midstream and Deepwater Oil & Gas Developments. “This Directive aims to facilitate the monetization of Nigeria’s extensive oil and gas resources.
“For Gas, 76% of our gas reserves, remain undeveloped. This explains why, despite possessing one of the largest gas reserves globally, we lack sufficient gas to meet our domestic needs for industry, for power and for cooking.
“The fiscal incentives introduced will attract the much-needed investments to enhance energy security, catalyze economic activity, attract essential foreign exchange, and promote job creation”.
On streamlining of Contracting Processes, Procedures and Timelines: she said that the President issued directives to reduce contracting timelines and project delivery. Benchmarking and analysis revealed that the contracting cycle takes up to 36 months.
“This Directive should have the effect of compressing this cycle to less than 6 month in line with global averages.This will expedite the delivery of oil and gas products to the market and enhance overall value for the country.
The Special Adviser to the President on Energy assigned to play a coordinating role in ensuring implementation within the timelines stipulated in the Directives. “I will follow up on implementing these directives and in return we expect the Operators to commit to their promises to make these
investments”, she said.
The Adviser said that there’s need to fuel economic growth at rates that significantly exceed the country population growth rate has never been more urgent. “The President strongly believes that private sector-led growth enabled by clear and inclusive government policies is the most enduring path to prosperity for all Nigerians.
“We will sustain engagement and
collaboration with key investors to ensure we attract capital and capabilities to this sector to catalyze job creation, productivity, income growth across multiple sectors.
“This administration is laser focused on enabling transformational economic opportunities to lift millions of hardworking Nigerians our of poverty”, she concluded.