Verheijen: Tinubu making Nigeria’s oil & gas investors’ destination

By Haruna Salami

President Bola Tinubu has recorded milestones in his bid to make Nigeria the choice destination for investors in the oil and gas sector.

The Special Adviser to the President on Energy, Mrs. Olu Verheijen who disclosed this on Friday, said the President has put measures in place for a conducive business climate in the industry.

Mrs Verheijen spoke at a ministerial press briefing held at the International Press Centre, Abuja.

According to her, Nigeria accounted for only 4 per cent of Africa’s total oil and gas investments since 2016 despite having 38 per cent of the continent’s hydrocarbon reserves.

READ ALSO: School Kidnapped: Minister appeals to security.

The president’s aide noted that a society is not rich because of its resources but because of what it does with those resources.

“His Excellency, President Bola Tinubu is determined to reverse this trend and take decisive steps to ensure a conducive business climate and reposition Nigeria as a preferred investment destination for the oil and gas sector,” she emphasised.

She added that the nation’s ambition to accelerate its economic growth and diversify the economy for the benefit of all Nigerians required timely, credible, clear and consistent policies.

“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 forex to stabilise our economy and currency. The oil and gas sector is critical to our ability to do so,” she said.

Mrs Verheijen however, regretted that the nation’s current oil and gas production and investment levels fall significantly short of its potential.

Verheijen said the President has issued a directive to streamline and clarify the scope regulators in the petroleum sector to provide certainty and create a conducive business environment.

She added that the President had also directed the National Security Adviser (NSA) and Special Adviser on Energy to coordinate enhanced security measures in the Niger Delta.

Owing to this directive, she said the Trans Niger Pipeline (TNP), which had been repeatedly vandalised is now enjoying improved uptime, stressing that crude availability has practically doubled since the directives were implemented.

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

Verheijen added that the President has also introduced fiscal incentives to deepen Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) penetration.

“These incentives were designed to ease the impact of fuel subsidy removal on transportation cost and to enable the displacement of PMS/Diesel and; to contribute to stabilising the price of cooking gas in the market and support the transition to clean cooking”.

The president’s aide also cited broad based initiatives like the Fiscal Incentives for Non-Associated Gas (NAG), Midstream and Deep water Oil and Gas Developments as part of the winning strategies.

“This directive aims to facilitate the monetisation of Nigeria’s extensive oil and gas resources. About 76 per cent of our gas reserves remain undeveloped, which explains why, despite possessing one of the largest gas reserves globally, Nigeria lacks 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, catalyse economic activity, attract essential foreign exchange, and promote job creation.

“The second incentive is streamlining of contracting processes, procedures and timelines. The President has issued directives to reduce contracting timelines and project delivery. This directive should have the effect of compressing this cycle from 36 months to less than six 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 third directive local content practice reform seeks to ensure that local content requirements are implemented in a manner that does not impede investments or the cost competitiveness of oil and gas projects”, she emphasised.

The President’s adviser added that policies are also in place to reduce the cost premium of operating in Nigeria, which presently stood at 40 per cent.

“we anticipate significant benefits from this reform, including the development of local companies’ capacity, thereby generating additional business opportunities, job creation and boosting economic growth.”

On subsidy, she said “subsidy was removed on May 29, 2023, however the government has the prerogative whether in the US, in the West and other Eastern countries, all governments have the prerogative to maintain price stability and prevent civil unrest. So, if prices are moving, they reserve the right to intervene. It is done in the US.

“During COVID-19, there were lots of interventionist moves, there were also subsidies. All governments reserve that right. So, if for political reason, the government has reviewed that, it is not the right time to have prices fluctuate given the level of hardship and inflation in the country”, she said.