The federal government has rolled out a new set of fiscal incentives aimed at revitalizing Nigeria’s struggling oil and gas industry, with the goal of attracting approximately N10 billion in investment within the next 12 to 18 months.
Developed and coordinated by the Special Adviser to the President on Energy, Mrs. Olu Verheijen, the presidential directives seek to establish a competitive framework for the Nigerian oil and gas sector. The consolidated guidelines for these fiscal incentives, developed in collaboration with key regulatory bodies such as the Federal Inland Revenue Service (FIRS), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), aim to provide clarity and support for industry players.
Speaking at the launch event, Verheijen emphasized that the new measures aim to deliver a competitive Internal Rate of Return (IRR) for oil and gas projects, with the objective of attracting over $10 billion in new investments within the specified timeframe. These initiatives underscore Nigeria’s commitment to achieving its long-term oil production target of 4 million barrels per day, while also bolstering gas supply reliability to enhance export earnings and fuel industrialization.
Among the key guidelines signed are those related to the categorization and quantification of hydrocarbon liquids content in non-associated gas (NAG) fields, as well as the applicability of tax credits and allowances for Non-Associated Gas Greenfield Development and Midstream Capital and Gas Utilization Allowance. These guidelines provide clarity for taxpayers on the computation of benefits, facilitating investment decisions and project planning.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, presided over the signing ceremony and acknowledged the stagnation experienced by the sector over the past decade. He endorsed the consolidated guidelines as a pivotal component of the presidential directive aimed at enhancing the global competitiveness of Nigeria’s oil and gas sector and stimulating economic growth. Edun expressed gratitude to President Bola Tinubu for signing the directive in February 2024, emphasizing the need to create an environment conducive to international competitiveness and attract Foreign Direct Investment (FDI).
The signing ceremony, attended by various stakeholders including the Nigerian National Petroleum Company Limited (NNPC), Oil Producers Trade Section (OPTS), and the Independent Petroleum Producers Group (IPPG), reflects Nigeria’s unified commitment to revitalizing its oil and gas sector and fostering sustainable economic development.