THE Special Adviser to the President on Energy, Mrs. Olu Verheijen yesterday said the administration of President Bola Tinubu opted for fiscal incentives in the Oil and Gas Sector to attract investments.
She also said the government was seeking ways to grow revenue and foreign exchange to stabilize our economy and currency.
She said enhanced security measures in the Niger Delta has led to increase in liquids of over 200,000 Barrels/day over the last six months.
She added that the stability in the oil producing areas has increased the availability of NLNG Trains 1-6 from 57% in 2023 to 70% in Q1 2024.
She stated that 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. But she said the removal of fuel subsidy was still on course.
She said: “We are faced with a revenue crisis which is impacting all Nigerians. To urgently address this, President Bola Tinubu is actively seeking ways to grow revenue and fore 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 fall significantly short of our potential.
“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.
“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 vandalized 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.”
On tapping the country’s gas potential, Verheijen said part of the objective of the fiscal incentives that the President recently signed was to reverse the over 70% undeveloped gas reserves.
She said “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.
“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 6 month 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 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.”