Mohammed Shosanya
Nigeria has attracted only 4% of African oil and gas investments since 2016, while investment has surged in other, less resource-rich nations,the Special Adviser to the President on Energy, Olu Verheijen has said.
She spoke to a diverse audience, at the African Energy Week in Cape Town, South Africa,a statement signed by her spokesperson, Abiodun Oladunjoye said.
She added:“Since 2016, Nigeria has managed to attract only 4 percent of total investments in oil and gas, while less resourced countries in Africa have enjoyed a bigger share. When we analyzed investment data, we also found that, between 2013, when Nigeria’s last deepwater project reached FID, and now, IOCs operating in Nigeria have committed more than $82 billion in deepwater investments in other countries that they have deemed to be more attractive destinations for their capital.”
Verheijen lamented that the country has underperformed in oil and gas production despite Nigeria’s wealth in the oil and gas industry.
She spoke on how countries like Brazil that has only 30% of Nigeria’s oil reserves has outperformed by producing 131% more than current production of Nigeria.
She said:“Despite our abundant endowments, we have underperformed against our potential. For example, Brazil holds only 30% of Nigeria’s oil reserves but produces 131% more. This is largely due to under-investment”.
She underscored the untapped potential within the industry and highlighted many efforts by President Tinubu’s administration to enact reforms aimed at reshaping Nigeria’s investment landscape.
Among these initiatives, she said the government has introduced fiscal incentives targeting deep offshore and non-associated gas projects, marking the first time Nigeria has outlined a fiscal framework specifically for deepwater gas.
She said her office has collaborated closely with the office of the National Security Adviser to create and distribute focused security directives, leveraging insights garnered from on-ground operators.
Besides,Verheijen disclosed steps to streamline approval processes by clearly defining the regulatory scopes involved.
This initiative, she explained, aims to significantly reduce the extended project timelines that have historically plagued the industry, as well as the high-cost premiums associated with operating in Nigeria.
She added: “Our target is to shorten the contracting timelines from an extensive 38 months to just 135 days, while also working to eliminate the 40% cost premium that currently exists within the Nigerian petroleum industry.”
She also disclosed efforts by the current President Tinubu administration to further open up the oil and gas sector for bigger investments with a set of clear fiscal incentives for non-associated gas and deep offshore oil and gas exploration and production.
She said:“This is the first time that Nigeria is outlining a fiscal framework for deepwater gas since exploration in the basin commenced in 1991″
According to her, amongst other initiatives, there has been a focus on midstream and downstream investments in Compressed Natural Gas, (CNG), liquefied petroleum gas, and electric vehicles as part of the Presidential Gas for Growth Initiative.
She added that the administration has also worked to streamline regulatory processes, shorten project timelines, and reduce the high-cost premium of operating in Nigeria.
She said:“We have also introduced fiscal incentives to catalyze investments in the midstream and downstream sectors, including, Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), and Mini Liquefied Natural Gas (LNG).
“These align with the broader Presidential Gas for Growth Initiative, which seeks to enable the displacement of PMS and Diesel in three key sectors: heavy transport, decentralised power generation and cooking. These incentives are also stimulating demand for Electric Vehicles.
“Our goal is to eliminate the 40% cost premium within the Nigerian petroleum industry and cut down contracting timelines from 38 months to 135 days,” Verheijen stated.
She said the government has unlocked over $1 billion across the energy value chain, with two more major investment projects expected by mid-2025.
“We are also facilitating the transfer of onshore and shallow water assets to local companies with the capacity to grow production, while supporting the transition of International Oil Companies, with resilient capital, into deep offshore and integrated gas. We have unlocked over $1 billion in investments across the value chain and by the middle of 2025 we expect to see FID on two more projects, including a multibillion-dollar deepwater exploration project, which will be the first of its kind in Nigeria in over a decade – one of many to come.”
She also addressed efforts by the Tinubu administration to revamp the nation’s power sector, with plans to provide more reliable electricity access for the 86 million Nigerians currently underserved.
She said the scheme aims to improve revenue assurance and collection.
Other key measures include tackling legacy debt, deploying seven million smart meters to reduce losses, and expanding off-grid solutions for remote communities.