The Federal Government of Nigeria aims to increase oil production to 4 million barrels per day (bpd) and boost gas output to 10 billion cubic feet (bcf) by 2030. This announcement follows the offshore oil and gas incentives introduced by President Bola Tinubu to stimulate investment in the sector.
Mrs. Olu Verheijen, Special Adviser to the President on Energy, revealed in a statement on Thursday that these reforms are designed to attract investments worth $5 billion to $10 billion in the near term. Since the approval of Nigeria’s last major deepwater project, Egina, in 2013, International Oil Companies (IOCs) have redirected over $82 billion in investments to more competitive markets. The government’s new approach seeks to reclaim these funds and channel them into Nigeria’s oil and gas industry.
Verheijen highlighted the longstanding issues hindering Nigeria’s oil production, including theft and a lack of investment. However, she noted that the government has initiated significant reforms since May 2023 to address these challenges, reduce operational costs, and improve the overall business environment.
Key reforms, including three presidential directives issued in February 2024, aim to create tens of thousands of jobs, increase foreign exchange earnings, boost tax revenue, and promote macroeconomic stability. Recently, President Tinubu approved two new fiscal incentives: a VAT waiver for gas, diesel, electric vehicles, and clean cooking equipment, as well as tax credits for investments in deepwater oil and gas exploration.
These incentives align with the Presidential Gas for Growth Initiative, which seeks to fast-track natural gas development and displace fossil fuels in transportation. Despite the growing global push for energy transition, 76% of Nigeria’s gas reserves remain untapped.
Industry leaders have praised the government’s efforts. Osagie Okunbor, Chairman of the Oil Producers Trade Section (OPTS), lauded the unprecedented coordination and policy coherence driving the sector. Rosario Osobase, Chairperson of the Petroleum Contractors Trade Section (PCTS), acknowledged the renewed optimism within the industry, thanks to the government’s strategic engagement and directives.
Meanwhile, a recent Reuters survey indicated a 40,000 bpd drop in Nigeria’s oil production, contributing to a broader OPEC decline in September. The report cited unrest in Libya and production cuts in Iraq as additional factors affecting global oil supply.