Nigeria has set an ambitious target to ramp up its oil production to four million barrels per day and gas production to 10 billion cubic feet by 2030, according to a recent announcement by the Federal Government. This bold plan is part of President Bola Tinubu’s administration’s vision for the energy sector.

Mrs. Olu Verheijen, Special Adviser to the President on Energy, shared this goal in a statement signed by Morenike Adewunmi, Stakeholder Manager in the Office of the Special Adviser. Verheijen highlighted the government’s strong commitment to reforming the oil and gas industry through incentives aimed at attracting investments and boosting production.

“Since President Tinubu took office in May 2023, several key reforms have been launched to enhance Nigeria’s oil and gas sector’s competitiveness,” she noted. These changes aim to streamline operations, cut costs, and improve the ease of doing business, especially in a sector critical to Nigeria’s foreign exchange earnings.

Major Reforms to Drive Investment and Growth

The new initiatives include three key presidential directives issued in February 2024, which are expected to create thousands of jobs, increase foreign exchange earnings, and boost tax revenues, while contributing to the country’s overall economic stability. Mrs. Verheijen’s office is overseeing the implementation of these reforms, with significant steps already being taken.

A core part of the structural changes is the introduction of fiscal incentives to stimulate investment in the sector. These include VAT exemptions on gas, diesel, electric vehicles, and clean cooking equipment, alongside tax credits for new investments in deepwater oil and gas exploration. The incentives were detailed in official documents signed by Wale Edun, Minister of Finance and Coordinating Minister of the Economy.

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The Value Added Tax (VAT) Modification Order 2024 and the Notice of Tax Incentives for Deep Offshore Oil & Gas Production are key elements of the new fiscal framework, aligning with President Tinubu’s push to make Nigeria’s energy sector more competitive.

Historic Fiscal Framework for Deepwater Gas Exploration

“For the first time, Nigeria has established a fiscal framework for deepwater gas exploration, a significant step forward since exploration began in 1991,” Verheijen remarked. She emphasized that these reforms support the Presidential Gas for Growth Initiative, which focuses on expanding natural gas development, promoting its use as a cleaner alternative in transportation, and making it more affordable for consumers.

Verheijen expressed optimism that the reforms would unlock over $10 billion in new investments in deepwater oil and gas projects in the near to medium term, pointing out that international oil companies have already invested billions in deepwater projects globally and that Nigeria’s revised incentives are designed to attract a significant portion of future investments.