Nigeria seeks $10 billion in new hydrocarbon investment

According to recent reports, the Federal Government of Nigeria is in the process of securing investments in the order of $10 billion following the establishment of consolidated guidelines for the implementation of tax incentives for the oil and gas sector.

These guidelines, drawn up in line with presidential instructions, are aimed at increasing international competitiveness and boosting the country's economic growth. An official signing ceremony took place, presided over by the Minister of Finance and Economic Coordinator, Wale Edun, at the headquarters of the Federal Ministry of Finance in Abuja.

According to a press release, these guidelines were designed under the leadership of Mrs. Olu Verheijen, Special Advisor to the President on Energy, to establish a robust and competitive framework for Nigeria's oil and gas industry. They are the result of close collaboration between the Ministries of Finance and Petroleum, with the participation of several key regulatory agencies, such as the Federal Inland Revenue Service, the Nigerian Upstream Petroleum Regulatory Commission, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

Ms. Verheijen emphasized that the new measures are designed to ensure an attractive internal rate of return for oil and gas projects, with the aim of attracting more than $10 billion in additional investment over the next 12 to 18 months.

She also affirmed Nigeria's commitment to achieving its long-term production target of 4 million barrels of oil per day, while improving gas supply reliability to boost export revenues and support the country's industrialization.

She also emphasized the importance of the NUPRC guideline on liquid hydrocarbon content in non-associated gas fields, essential for accurately assessing the amount of liquid hydrocarbons in these fields. Other guidelines deal with the applicability of tax credits, allowances for the development of new non-associated gas fields, and allowances for capital assets and midstream gas utilization, providing taxpayers with clear guidelines for calculating these benefits.

Wale Edun expressed his gratitude to President Asiwaju Bola Ahmed Tinubu for approving these guidelines in February 2024, marking the start of a period of growth for the Nigerian oil and gas sector, which has stagnated over the past decade.