President Bola Tinubu has ordered a reduction of the contracting and project delivery timelines in the Oil and Gas Sector from 36 months to six months to expedite the delivery of oil and gas products to the market and enhance overall value for the country.
The directive followed a benchmarking and analysis which revealed that the contracting cycle hitherto took up to 36 months and needed to be compressed to less than six months in line with global averages.
Special Adviser to the President on Energy, Mrs. Olu Verheijen who disclosed this on Friday, March 8, while unfolding plans of Tinubu’s administration at a briefing in Abuja, said the President opted for fiscal incentives in the Oil and Gas Sector to attract investments.
The briefing was attended by the Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, the Senior Special Assistant to the President on Media and Publicity, Mr. Temitope Ajayi and other top government functionaries.
She said the government was seeking ways to grow revenue and foreign exchange to stabilize the Naira and the economy.
“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 foreign exchange 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 and diversify the economy for the benefit of all Nigerians”, Mrs. Verheijen said.
She noted that towards actualizing these objectives, President Tinubu had issued a directive to streamline and clarify the scope of the two regulators in the petroleum sector to provide certainty as well as create a conducive business environment.
According to her, the President had also directed the National Security Adviser and the Special Adviser on Energy to coordinate enhanced security measures in the Niger Delta, resulting in the TNP pipeline which had been repeatedly vandalized now enjoying improved uptime while availability has practically doubled since the directives were implemented.
Mrs. Verheijen further noted that enhanced security measures in the Niger Delta region has led to an increase in liquids of over 200,000 barrels per day over the last six months; just as stability in the oil producing areas has increased the availability of NLNG Trains 1-6 from 57% in 2023 to 70% in Q1 2024.
On tapping the country’s gas potential, she said part of the objective of the fiscal incentives that the President recently signed was to reverse the over 70% undeveloped gas reserves.
“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.”
Responding to a question, the presidential adviser said the government was on course on the removal of fuel subsidy and 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.”
