An initiative aimed at incentivizing investors in Nigeria's oil and gas sector to attract $10 billion in investment was unveiled yesterday by Wale Edun, the Minister of Finance and Coordinator of the Economy. This initiative is part of the Presidential Directive focused on enhancing the sector's global competitiveness to stimulate economic growth. The event, held at the headquarters of the Federal Ministry of Finance in Abuja, culminated in the endorsement of the Consolidated Guidelines for the implementation of Fiscal Incentives for the Oil & Gas Sector.
These guidelines, developed and coordinated by the Special Adviser to the President on Energy, Mrs. Olu Verheijen, aim to provide a competitive framework for the Nigerian oil and gas industry. They are the result of extensive collaboration across ministries and regulatory bodies, including the Federal Inland Revenue Service (FIRS), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Mrs. Verheijen stated that these measures are designed to deliver a competitive Internal Rate of Return (IRR) for Oil & Gas Projects and attract over $10 billion in new investments within the next 12-18 months. She emphasized Nigeria's commitment to reaching its long-term oil production target of 4 million barrels per day while enhancing gas supply reliability to boost export earnings and fuel industrialization.
The guidelines include the NUPRC Guideline on Hydrocarbon Liquids Content in a Non-Associated Gas (NAG) Field, which accurately categorizes and quantifies the hydrocarbon liquid content in these fields. They also address the applicability of tax credits and allowances for Non-Associated Gas Greenfield Development and the Midstream Capital and Gas Utilization Allowance, providing clarity on the computation of these benefits.
Edun commended President Bola Ahmed Tinubu for signing the directive in February 2024 to spur growth in the Nigerian oil and gas sector, which he noted had stagnated for more than 10 years. He highlighted the potential of the guidelines to create an atmosphere conducive to international competitiveness, attracting foreign direct investment. The signing ceremony was attended by stakeholders such as NNPC Limited, Oil Producers Trade Section (OPTS), and the Independent Petroleum Producers Group (IPPG), showcasing Nigeria's unified approach to reinvigorating its oil and gas sector.
