FG set to increase oil, gas production with new investment climate —Adviser

The Special Adviser to the President on Energy, Mrs. Olu Verheijen, yesterday said the Tinubu administration opted for fiscal incentives in the oil and gas Sector with a view to attracting foreign investments.
The move, according to her, was also motivated to grow revenue and foreign exchange to stabilise the economy and the naira.

Verheijen, who spoke at a media briefing in Abuja on the energy plan of the government, said enhanced security measures in the Niger Delta are already yielding positive results with crude oil production rising by over 200,000 barrels per day over the last six months.

Besides, she said the stability in the oil producing areas has increased the availability of NLNG Trains 1-6 from 57% in 2023 to 70% in the first quarter of 2024.

The President, she said, has also directed that the contracting and project delivery timelines in the Oil and Gas Sector be reduced from 36 months to six months while the removal of fuel subsidy remains firmly on course.

The Energy Adviser with whom were the Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, and the Senior Special Assistant to the President on Media and Publicity, Mr. Temitope Ajayi, among other top government functionaries, said government was working hard to make Nigeria the preferred destination for oil and gas investments in Africa.

She said: “The oil and gas sector is critical to our ability to do so. However, our current oil and gas production and investment levels fall significantly short of our potential.

“Since 2016, Nigeria has only accounted for only four per cent (4%) of Africa’s total oil and gas investments, despite possessing thirty-eight per cent (38%) of the continent’s hydrocarbon reserves.

“His Excellency, President Bola Ahmed Tinubu, is determined to re-write this narrative. His focus is to remove obstacles to investments in Nigeria; improve the Investment Climate; position Nigeria as the preferred investment destination for the Oil & Gas sector in Africa; diversify the economy for the benefit of all Nigerians.

“To achieve these objectives, Mr. President 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.

·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 vandalised is now enjoying improved uptime; availability has practically doubled since these directives were implemented.

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

Verheijen explained that one of the objectives of the fiscal incentives recently approved by the President was to accelerate gas reserves production of which over 70% is currently untapped.

“We need to address the fundamental issues in sectors so that we can attract capital to the infrastructure, and there is no one who’s going to invest in Infrastructure if they don’t have assurance, the line of sight to the attractiveness of gas supply,” she said.

Continuing, she said: “So, if gas suppliers are not making any investment because the fiscal terms of the business environment is a very difficult one in which to invest in, then it will be difficult to continue to mature mainstream projects and downstream projects because you have to deal with the ab initio problem, which is gas supply.

“And that is exactly what President Bola Ahmed Tinubu has done by fast tracking this policy directives to ensure that we have sufficient gas supply, whether we’re trying to export, whether we’re trying to compress natural gas or liquefied for domestic use, whether we’re trying to have floating energy as an alternative ways of getting gas into the market, all of those things are enabled by these policies.”

The Special Adviser said the President has also directed that the contracting and project delivery timelines in the Oil and Gas Sector be reduced from 36 months to six months.

She added: The President has issued directives to reduce contracting timelines and project delivery.

Benchmarking and analysis revealed that the contracting cycle takes up to 36 months. This Directive should have the effect of compressing this cycle to less than six months in line with global averages.

“This will expedite the delivery of oil and gas products to the market and enhance overall value for the country.

Responding to a question, the Special Adviser said the government was on course on the removal of fuel subsidy.

She said the government was only working assiduously to ensure price stability.

She said: “The question of subsidy, the subsidy was removed on May 29, 2023. However, the government has the prerogative whether in the US, in the West or other Eastern countries, all governments have the prerogative to maintain price stability and prevent social unrest.

“So if prices are moving, they reserve the right to intervene. It started in the US during COVID. There was a lot of expansionist moves but also subsidies.

“All governments deserve that right. And so if for whatever reason the administration has reviewed that it is not the right time to have prices continue to fluctuate given the level of hardship in the country, given inflation, the government has the right to intervene intermittently.

“All governments do so but it does not take away the fact that the subsidy was removed.”

On pricing of cooking gas, she said the President has approved the fast tracking of fiscal incentives to enable more investments into the LPG space in the hope that “if we achieve scale up , we can bring down costs. And we can also incentivize the domestication of some of our LNG production.”

She added: “We started it, but unfortunately foreign exchange and the market prices began to increase.

“We’re going to continue to work and look at more opportunities to improve supply and scale up and enable all LPG into the market at affordable prices. It’s a priority of this administration.

On the latest executive order signed by the President, Verheijen stressed that the ambition of the administration was “to accelerate our economic growth and diversify the economy for the benefit of all Nigerians.”

<<The Nation>>

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