WHY TINUBU SIGNED EXECUTIVE ORDERS ON GAS, ENERGY –Mrs. Olu Verheijen,

By Tobouke JEMINE

The Special Adviser to the President on Energy, Mrs. Olu Verheijen, while addressing the media in Abuja on Friday, gave the reasons behind President Bola Ahmed Tinubu’s signing of Executive Orders to transform the gas and energy sectors of the economy, stating that gas remains the best means for Nigeria to attain energy stability.

The Special Adviser pointed out that the move made by President Tinubu is aimed at making gas available to Nigerians without delay at affordable rates and minimize reliance on premium motor spirit and automotive gas oil.

Mrs. Verheijen said: “Our ambitions to accelerate our economic growth and diversify the economy for the benefit of all Nigerians require timely, credible, clear and consistent policy. 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 forex 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 falls significantly short of our potential.

“Since 2016, Nigeria has only accounted for only four percent four percent of Africa’s total oil and gas investments, despite possessing 38 percent of the continent’s hydrocarbon reserves. A society is not rich because of its resources but because of what it does with those resources. President Bola Ahmed Tinubu is determined to reverse this trend and take decisive steps to ensure to a conducive business climate and reposition Nigeria as a preferred investment destination for oil and gas sector,” she explained.

Mrs Verheijen said that it was in the spirit of reversing the negative tends in the oil and gas sector that the president issued a directive to streamline and make understandable the scope of two regulators in the petroleum sectors and to create a contributive business environment for the stakeholders.

The energy adviser pointed out that as a result of the presidential directive, the TNP pipeline, which had been severally suffered vandalization, is now enjoying improved uptime and doubled its availability, resulting in increased liquids of over 200,000 barrels per day, being transported over the last six months and increasing the availability of NLNG Trains 1-6 from 57 percent in 2023 to 70 percent in Q1 2024.

The adviser said the president had also brought in fiscal incentives to deepen Compressed Natural Gas (CNG) and Liquified Petroleum Gas (LPG) penetration, with the aim of easing the negative impact of fuel subsidies on transportation cost, enabling the supplanting of PMS/AGO and contributing to stabilising the price of cooking gas in the market and aid the transition to clean cooking.

The Special Adviser explained that the Fiscal Incentives for Non-Associated Gas (NAG), Midstream and Deepwater Oil and Gas Developments is introduced facilitate the monetization of Nigeria’s extensive oil and gas resources.

The presidential aide said: “For Gas, 76 percent of our gas reserves, remain undeveloped. This explains why, despite possessing one of the largest gas reserves globally, we lack sufficient gas to meet our domestic needs for industry, for power and for cooking. The fiscal incentives introduced will attract the much-needed investments to enhance energy security, catalyze economic activity, attract essential foreign exchange, and promote job creation.

“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 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.

“Local Content Practice Reform: This Directive seeks to ensure that local content requirements are implemented in a manner that does not impede investments or the cost competitiveness of oil and gas projects. This Directive aims to reduce the cost premium of operating in Nigeria, presently averaging at 40 percent. We anticipate significant benefits from this reform, including the development of local companies’ capacity, thereby generating additional business opportunities, job creation and boosting economic growth.

When asked on how the new policies would translate to the desired economic results, Mrs Verheijen, responded that the responsibilities, obligations and functions had been shared among different levels of government agencies to be followed up by her office.

She further said that , “the Minister of Finance/Co-coordinating Minister of the Economy will develop and propose amendments to introduce fiscal incentives for deep-water developments into legislation while the Federal Inland Revenue Service (FIRS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will issue guidelines on the implementation of the fiscal incentives.”