Nigeria to increase oil and gas production by 200,000 bpd in new investment climate –Official

*Olu Verheijen, Presidential aide on Energy, discloses disclosed President Bola Ahmed Tinubu’s administration introduced fiscal incentives in the Oil and Gas Sector to attract investments, stating petrol subsidy removal is still in force in Nigeria

Gbenga Kayode | ConsumerConnect

Mrs. Olu Verheijen, Special Adviser to the President on Energy, has disclosed the administration of President Bola Ahmed Tinubu introduced fiscal incentives in the Oil and Gas Sector in order to attract investments into the industry.

ConsumerConnect reports  Mrs. Verheijen, who stated this Friday, March 8, 2024, at the Ministerial Press Briefing Series, in Abuja, FCT, also unveiled President Tinubu administration’s plan for the oil and gas industry.

In attendance at the briefing include Mr. Bayo Onanuga, Special Adviser  to the President on Information and Strategy, and Mr. Temitope Ajayi,  Senior Special Assistant (SSA) to the President on Media and Publicity, and other top government functionaries.

Verheijen equally noted that the Federal Government is seeking ways to grow revenue and Foreign Exchange (Forex) to stabilise the economy and currency of the West African country.

The Presidential aide also said enhanced security measures in the Niger Delta had led to increase in liquids of over 200,000 barrels/day (bpd) over the last six months.

The stability in the oil producing areas has  increased the availability of NLNG Trains 1-6 from 57% in 2023  to 70% in Q1 2024, she said.

According to her, the Nigerian President has also directed that the contracting and project delivery timelines in the Oil and Gas Sector be reduced from 36 months to six months.

But she said the removal of fuel subsidy is still on course in the downstream petroleum sector.

The Energy Adviser to the President further stated the government is working hard to make Nigeria the preferred destination for oil and gas investments in Africa.

“We are faced with a revenue crisis which is impacting all Nigerians. To urgently address this, President Bola Tinubu is actively seeking ways to grow revenue and fore to stabilise our economy and currency.

“The Oil and Gas sector is critical to our ability to do so. However, our current oil and gas production and investment levels fall significantly short of our potential,” Verheijen said.

She also explained: “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.

“His Excellency, President Bola Ahmed Tinubu is determined to re-write this narrative.

“His focus is to remove obstacles to investments in Nigeria; improve the Investment Climate; position Nigeria as the preferred investment destination for the Oil & Gas sector in Africa; diversify the economy for the benefit of all Nigerians

According to Verheijen, to achieve these objectives, Mr. President has done the following:

*Issued a 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.

The Presidential aide on Energy noted, “Owing to this directive, the TNP pipeline, which had been repeatedly vandalised is now enjoying improved uptime; availability has practically doubled since these directives were implemented.

“This has translated to increased liquids of over 200,000 barrels/day being transported over the last 6 months. It has increased the utilization of NLNG Trains 1-6 from 57% in 2023 to 70% in Q1 2024.”

Tapping Nigeria’s gas potential

In respect of exploiting the country’s vast oil and gas reserves, Verheijen said part of the objective of the recent fiscal incentives that the President recently signed was to reverse the over 70 percent undeveloped gas reserves.

She said: “We need to address the fundamental issues in sectors so that we can attract capital to the infrastructure.

“And there is no one who’s going to invest in Infrastructure if they don’t have assurance, the line of sight to the attractiveness of gas supply.”

Verheijen stated: “So, if gas suppliers are not making any investment because the fiscal terms of the business environment are a very difficult one in which to invest in, then it will be difficult to continue to mature mainstream projects and downstream projects because you have to deal with the ab initio problem, which is gas supply.

“And that is exactly what President Bola Ahmed Tinubu has done by fast tracking this policy directives to ensure that we have sufficient gas supply whether we’re trying to export, whether we’re trying to compress natural gas or liquefied for domestic use, whether we’re trying to have floating energy as an alternative ways of getting gas into the market, all of those things are enabled by these policies.”

The Special Adviser restated that President Tinubu has directed that the contracting and project delivery timelines in the Oil and Gas Sector be reduced from 36 months to six months.

“The President has 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 six months 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,” Mrs. Verheijen said at the media briefing.

She said while Nigerian government sustains the removal of fuel subsidy, it is also only working assiduously to ensure price stability in the economy.

She said, “Subsidy was removed on May 29, 2023. However, the government has the prerogative whether in the US, in the West or other Eastern countries, all governments have the prerogative to maintain price stability and prevent social unrest.

“So, if prices are moving, they reserve the right to intervene. It started in the US during COVID. There was a lot of expansionist moves but also subsidies.”

The Energy Adviser asserted: “All governments deserve that right.

“And so, if for whatever reason the administration has reviewed that it is not the right time to have prices continue to fluctuate given the level of hardship in the country, given inflation, the government has the right to intervene intermittently.

“All governments do so but it does not take away the fact that the subsidy was removed.”

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