The federal government has launched new fiscal incentives to revitalise the oil and gas industry’s contribution to the Nigerian economy, targeting $10 billion in new investments in 18 months.
On February 28, President Bola Ahmed Tinubu signed three executive orders as part of the federal government’s plans to improve the investment climate of the country.
Launching the incentives, Wale Edun, the minister of finance and coordinating minister of the economy, presided over the signing ceremony at the federal ministry of finance headquarters in Abuja, according to a statement on Tuesday.
The event marked the endorsement of the consolidated guidelines for the implementation of fiscal incentives for the energy sector — a key component of the presidential directive, aimed at enhancing the global competitiveness of Nigeria’s oil and gas sector and stimulating economic growth.
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The statement said the presidential directives were developed and coordinated by Olu Verheijen, special adviser to the president on energy, to ensure a competitive framework for the energy industry.
“These Consolidated guidelines for the fiscal incentives are based on extensive collaboration across Finance and Petroleum Ministries and involved several key regulatory bodies including the Federal Inland Revenue Service (FIRS), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA),” the statement reads.
Verheijen said the new measures have been designed to deliver a competitive internal rate of return (IRR) for oil and gas projects and attract over $10 billion in new investments within the next 12 to 18 months.
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She said they also “underscore Nigeria’s commitment to reaching its long-term oil production target of 4 million barrels per day whilst enhancing the reliability of gas supply to boost export earnings and fuel Nigeria’s industrialization”.
The special adviser said the guidelines signed were the NUPRC rules on hydrocarbon liquid content in a non-associated gas (NAG) field, essential for accurately categorising and quantifying the hydrocarbon liquid content in the fields.
Others, she said, focused on the applicability of tax credits and allowances for NAG greenfield development, and the midstream capital and gas utilisation allowance, providing taxpayers with clarity on the computation of these benefits.
In his remarks, Edun lauded Tinubu for signing the directive in February to engender growth in the Nigerian oil and gas sector, which had stagnated for over the last decade.
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“The idea is to create an atmosphere conducive to international competitiveness such that investment comes in. And in this case, we know it’s foreign direct investment,” he said.
The signing ceremony was attended by various stakeholders, including the Nigerian National Petroleum Company (NNPC) Limited, Oil Producers Trade Section (OPTS), and the Independent Petroleum Producers Group (IPPG).
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