Mohammed Shosanya

The Presidency,has disclosed many gains already recorded by President Ahmed Bola Tinubu’s Interventions in energy sector, highlighting that how recent directives by the President increased the availability of NLNG Trains 1-6 from 57% in 2023 to 70% in Q1, 2024.

Mrs. Olu Arowolo Verheijen, the Special Adviser on Energy to His Excellency, President Bola Ahmed Tinubu,stated this on Friday at press briefing on the impacts of policy directives on oil and gas reforms.

According to her,President Bola Tinubu is actively seeking ways to grow revenue and forex to stabilize the country’s economy and currency, as Nigerians are faced with a revenue crisis which is impacting all everyone.

She said the oil and gas sector is critical to the nation’s ability to the situation even though it’s current oil and gas production and investment levels falls significantly short of its potential.

She added:”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. A society is not rich because of its resources but because of what it does with those resources.

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

To achieve these objectives,she said President Tinubu has 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.

She also said the President has directed the NSA and Special Adviser on Energy to coordinate enhanced security measures in the Niger Delta.

Owing to this Directive, the TNP pipeline which had been repeatedly vandalized is now enjoying improved uptime; availability has practically doubled since these directives were implemented,she said.

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

“The President has also introduced fiscal incentives to deepen Compressed Natural Gas (CNG) and Liquified Petroleum Gas (LPG) penetration. These incentives were designed to: ease the impact of fuel subsidies on transportation cost and enable the displacement of PMS/Diesel and; contribute to stabilizing the price of cooking gas in the market and support the transition to clean cooking.

“Following extensive engagements, analysis and benchmarking, with industry operators and regulators, the President has taken further action to address foundational issues identified in the course of these engagements.

“Mr President has initiated amendment of primary legislation to introduce fiscal incentives, reduce project execution timelines and promote cost efficiency. However, recognising the urgency to accelerate investments to stabilise the economy, His Excellency executed these Policy Directives to clearly signal the policy direction of this administration to both the market and regulators.

“The Policy Directives are: Fiscal Incentives for Non-Associated Gas (NAG), Midstream and Deepwater Oil & Gas Developments: This Directive aims to facilitate the monetization of Nigeria’s extensive oil and gas resources. For Gas, 76% of our gas reserves, remain undeveloped.

” This explains why, despite possessing one of the largest gas reserves globally, we lack 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, catalyze economic activity, attract essential foreign exchange, and promote job creation.

She further explained that for proper coordination the Special Adviser to the President on Energy to play a coordinating role in ensuring implementation within the timelines stipulated in the directives.

She said:”I will follow up on implementing these directives and in return we expect the Operators to commit to their promises to make these investments.

“Our need to fuel economic growth at rates that significantly exceed our population growth rate has never been more urgent.

“The President strongly believes that private sector-led growth enabled by clear and inclusive government policies is the most enduring path to prosperity for all Nigerians. We will sustain engagement and collaboration with key investors to ensure we attract capital and capabilities to this sector to catalyze job creation, productivity, income growth across multiple sectors”.

Mohammed Shosanya

Mrs Olu Arowolo Verheijen, the Special Adviser to President Bola Ahmed Tinubu on Energy,says the federal government is still intervening to prevent a market -driven price of petroleum products despite the removal of fuel subsidy on May 29,2023.

Verheijen,who disclosed this on Friday in Abuja,insisted that it is the prerogative of all governments to intervene intermittently in critical sectors of the economy to ensure price stability and forestall social chaos.

She told journalists that no government in the world,will allow prices of essential fuel to fluctuate out of control and push up inflation without some form of intervention, subsidy or no subsidy.

“The subsidy was removed on May 29, 2023. However, the government has a prerogative, whether in the US, in the West, Asia , all of them have a prerogative to maintain price stability. All government has prerogative to maintain price stability and not allow price to fluctuate. If prices fluctuate, they deserve the right to intervene to avoid social unrest. Even in the US , during the COVID there were a lot of expressionist groups,there were also subsidies.

” All government deserves that right. And so if the administration determines that given the hardship in the country, it is not the right time to allow prices to continue to fluctuate and cause inflation, the government has to intervene intermittently but it does not remove the fact that subsidy was removed ”

She spoke on the incessant hiccups experienced in the supply of electricity across the country, she admitted to some fundamental issues that must be addressed before the country can attract necessary capital and investment that will guarantee stable power , adding that Tinubu administration is walking the talking towards fixing the problem.

“When it comes to off grid ,we should realize that we are not yet ready to diversify the energy needs of electricity, especially off grid electricity, because of some underlying structural issues that needs to be addressed. The financial stability of that entire value chain is critical and has to be addressed, if we are to address the challenges and constraints that we have in transmission and distribution of power.

” Until we address some of these fundamental issues, ensuring that the Discos for example, make sure that all customers are metered and we extract some level of assurance of stability down the whole electricity value chain ,then we will not be able to attract capital into distribution, we will not be able to attract capital into transmission and also we will not be able to pay your current gas suppliers, or potentially your solar or hydro suppliers of generation capacity.

“So the fundamental issue we are addressing at the moment is to focus financial liquidity with technology intervention through the Presidential Metering Initiative for example, reviewing costs and structural issues that allow capital to flow into the entire value chain, and then allow us to diversify into biogas in the near future”.

According to her,the ambition of government is accelerate economic growth and diversify the
economy for the benefit of all Nigerians through credible, clear and consistent policy. She however pointed out that the administration is faced with a revenue crisis which is impacting negatively on all Nigerians.

“To urgently address this, President Bola Tinubu is actively seeking
ways to grow revenue and forex to stabilize 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
falls significantly short of our potential”,she said.