Financial Energy Review
…..by Ben Ndubuwa…..
Nigeria is set to attract a significant share of global deepwater investment, following the implementation of a new fiscal framework for upstream projects by President Bola Tinubu’s administration. According to Mrs. Olu Verheijen, Special Adviser to the President on Energy, the recent reforms could position Nigeria to capture 20 percent of the $90 billion available for deepwater projects globally, unlocking 1.3 billion barrels of oil equivalent (boe) across five major projects.
Speaking at an executive session hosted by the Energy Institute Nigeria and the Nigerian Association of Petroleum Explorationists (NAPE), Verheijen highlighted the transformative potential of the administration’s energy reform agenda. “Nigeria’s deepwater oil projects now deliver competitive returns, positioning Nigeria from the bottom quartile to the top three globally,” she said. “With the new fiscal framework, we are set to unlock significant investment, boosting our energy future and driving sustainable growth for Africa.”
Historic Fiscal Framework in Place
For the first time, Nigeria has a fiscal framework tailored for deepwater gas, which Verheijen stated will “boost our energy security and transform Nigeria’s global standing in the sector.” She attributed this shift to the administration’s focus on attracting international oil companies (IOCs) with “high-powered resilient capital and technical capacity” for deepwater projects, a move expected to strengthen Nigeria’s energy supply to international markets.
Tackling Security Challenges for Onshore Projects
One of the administration’s priorities has been addressing security issues affecting onshore projects, particularly in the Niger Delta. Verheijen emphasized the collaboration with the Office of the National Security Adviser and industry operators to develop targeted security directives. “These measures have directly improved the uptime of the Trans Niger Pipeline,” she noted, adding that all operating companies along this pipeline can now produce with greater reliability.
Milestones in Energy Reform
Over the last 18 months, President Tinubu’s administration has focused on “addressing real bottlenecks and advancing key projects,” said Verheijen. A major milestone was the Final Investment Decision (FID) on the Ubeta Non-Associated Gas project in April 2024, a $500 million project first discovered in 1965 and now poised to deliver economic benefits to millions of Nigerians.
Additionally, Verheijen announced that Nigeria is preparing for its first greenfield deepwater development FID since the Egina project in 2013, signaling a new era for Nigeria’s offshore projects.
Boosting Economic Stability
Verheijen underscored the economic benefits of these investments, which she said will “drive foreign exchange inflows, support exchange rate management, and stabilize the macroeconomy.” The government’s strategy also includes a focus on local economies, with increased construction spending and job creation expected across the sector.
Competitive Edge in Global Market
According to Verheijen, post-PIA (Petroleum Industry Act) analysis revealed the need to enhance Nigeria’s competitiveness in deepwater and non-associated gas. The government responded with targeted incentives, ensuring alignment with Nigeria’s fiscal policy and maintaining positive revenue outcomes.
A Vision for the Future
Reflecting on the administration’s energy reform vision, Verheijen stressed the importance of long-term strategic thinking. “Our challenges are addressable and fixable,” she said. “While it’s still early days for our reform journey, I remain optimistic—we must be, to do this job. We look to the future with excitement, knowing that the right decisions will yield the right results.”
The reforms, Verheijen stated, are part of President Tinubu’s broader vision to reinvigorate Nigeria’s oil and gas sector with a focus on sustainable growth, enhanced competitiveness, and a commitment to addressing investor concerns and ensuring Nigeria’s leadership in Africa’s energy landscape.
