Why Nigeria’s daily oil output has risen by 200,000 barrels – Presidential Adviser
Nigeria’s crude oil daily output has increased by 200,000 barrels over the last six months due to security measures introduced in the Niger Delta, a presidential aide has said.
Stability in the oil producing areas has also increased the availability of NLNG Trains 1-6 from 57 per cent in 2023 to 70 per cent in the first quarter of 2024, the Special Adviser to the President on Energy, Olu Verheijen, said.
She stated this on Friday in Abuja at a media briefing on policy directives of the President Bola Tinubu administration’s oil and gas sector reforms.
Mrs Verheijen noted that Nigeria’s ambitions to accelerate economic growth and diversify its economy was being hampered by a revenue crisis. To address the challenge, she said, President Tinubu has been “seeking ways to grow revenue and forex to stabilise 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 fall significantly short of our potential.”
According to the special adviser, since 2016, Nigeria has accounted for only four per cent of Africa’s total oil and gas investments, despite possessing 38 per cent of the continent’s hydrocarbon reserves.
“President Bola Ahmed Tinubu is determined to reverse this trend and take decisive steps to ensure a conducive business climate and reposition Nigeria as a preferred investment destination for the oil and gas sector.”
To achieve these objectives, she said the president “issued a presidential directive to streamline and clarify the scope of the two regulators in the petroleum sector to provide certainty and create a conducive business environment.”
She said the president also directed the National Security Adviser (NSA), Nuhu Ribadu, and herself (Mrs Verheijen) to coordinate “enhanced security measures in the Niger Delta.
“Owing to this directive, the TNP pipeline which had been repeatedly vandalised is now enjoying improved uptime; availability has practically doubled since these directives were implemented. This has translated to increased liquids of over 200,000 barrels/day being transported over the last 6 months. It has increased the availability of NLNG Trains 1-6 from 57 per cent in 2023 to 70 per cent in Q1 2024.”
Mrs Verheijen said fiscal incentives were also introduced to deepen Compressed Natural Gas (CNG) and Liquified Petroleum Gas (LPG) penetration.
READ ALSO: Senate debates bill to allow banks debit loan defaulters’ accounts through BVN
“These incentives were designed to: ease the impact of fuel subsidies on transportation cost and enable the displacement of PMS/Diesel and; contribute to stabilizing the price of cooking gas in the market and support the transition to clean cooking.”
She also outlined other steps being taken by the administration to address “foundational issues” identified in the sector, after engagements with the major stakeholders.
“Mr President has initiated amendment of primary legislation to introduce fiscal incentives, reduce project execution timelines and promote cost efficiency.
“However, recognising the urgency to accelerate investments to stabilise the economy, His Excellency executed these Policy Directives to clearly signal the policy direction of this administration to both the market and regulators.
“The Policy Directives are:
Fiscal Incentives for Non-Associated Gas (NAG), Midstream and Deepwater Oil & Gas Developments:
“This Directive aims to facilitate the monetisation of Nigeria’s extensive oil and gas resources. For Gas, 76 per cent 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.
“Streamlining of Contracting Processes, Procedures and Timelines:
“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 six 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 per cent. 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.
“Implementing Partners
“A diverse array of stakeholders was consulted and provided input into. Some of these stakeholders will be responsible for implementation.
“Fiscal Incentives:
“The Minister of Finance/Co-ordinating Minister of the Economy will develop and propose amendments to introduce fiscal incentives for deep-water developments into legislation. The Federal Inland Revenue Service (FIRS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will issue guidelines on the implementation of the fiscal incentives.
“Streamlining of Contracting Processes, Procedures and Timelines:
“The MOFI, MOPI, Nigerian Content Monitoring and Development Board, NNPCL will be responsible for implementation and enforcement.
“Local Content Practice Reform:
“The NCDMB is responsible for implementing the Directive and issuing supporting guidelines.
“Details on the role of each stakeholder are contained in the Policy Directives, which have been Gazetted and will be distributed shortly.
“Co-ordination
“The Special Adviser to the President on Energy to play a coordinating role in ensuring implementation within the timelines stipulated in the Directives. • I will follow up on implementing these directives and in return we expect the Operators to commit to their promises to make these investments.
Conclusion
“Our need to fuel economic growth at rates that significantly exceed our population growth rate has never been more urgent. The President strongly believes that private sector-led growth enabled by clear and inclusive government policies is the most enduring path to prosperity for all Nigerians. We will sustain engagement and collaboration with key investors to ensure we attract capital and capabilities to this sector to catalyse job creation, productivity, income growth across multiple sectors. This administration is laser focused on enabling transformational economic opportunities to lift millions of hardworking Nigerians out of poverty.”
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Nigeria’s crude oil daily output has increased by 200,000 barrels over the last six months due to security measures introduced in the Niger Delta, a presidential aide has said.
Stability in the oil producing areas has also increased the availability of NLNG Trains 1-6 from 57 per cent in 2023 to 70 per cent in the first quarter of 2024, the Special Adviser to the President on Energy, Olu Verheijen, said.
She stated this on Friday in Abuja at a media briefing on policy directives of the President Bola Tinubu administration’s oil and gas sector reforms.
Mrs Verheijen noted that Nigeria’s ambitions to accelerate economic growth and diversify its economy was being hampered by a revenue crisis. To address the challenge, she said, President Tinubu has been “seeking ways to grow revenue and forex to stabilise 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 fall significantly short of our potential.”
According to the special adviser, since 2016, Nigeria has accounted for only four per cent of Africa’s total oil and gas investments, despite possessing 38 per cent of the continent’s hydrocarbon reserves.
“President Bola Ahmed Tinubu is determined to reverse this trend and take decisive steps to ensure a conducive business climate and reposition Nigeria as a preferred investment destination for the oil and gas sector.”
To achieve these objectives, she said the president “issued a presidential directive to streamline and clarify the scope of the two regulators in the petroleum sector to provide certainty and create a conducive business environment.”
She said the president also directed the National Security Adviser (NSA), Nuhu Ribadu, and herself (Mrs Verheijen) to coordinate “enhanced security measures in the Niger Delta.
“Owing to this directive, the TNP pipeline which had been repeatedly vandalised is now enjoying improved uptime; availability has practically doubled since these directives were implemented. This has translated to increased liquids of over 200,000 barrels/day being transported over the last 6 months. It has increased the availability of NLNG Trains 1-6 from 57 per cent in 2023 to 70 per cent in Q1 2024.”
Mrs Verheijen said fiscal incentives were also introduced to deepen Compressed Natural Gas (CNG) and Liquified Petroleum Gas (LPG) penetration.
READ ALSO: Senate debates bill to allow banks debit loan defaulters’ accounts through BVN
“These incentives were designed to: ease the impact of fuel subsidies on transportation cost and enable the displacement of PMS/Diesel and; contribute to stabilizing the price of cooking gas in the market and support the transition to clean cooking.”
She also outlined other steps being taken by the administration to address “foundational issues” identified in the sector, after engagements with the major stakeholders.
“Mr President has initiated amendment of primary legislation to introduce fiscal incentives, reduce project execution timelines and promote cost efficiency.
“However, recognising the urgency to accelerate investments to stabilise the economy, His Excellency executed these Policy Directives to clearly signal the policy direction of this administration to both the market and regulators.
“The Policy Directives are:
Fiscal Incentives for Non-Associated Gas (NAG), Midstream and Deepwater Oil & Gas Developments:
“This Directive aims to facilitate the monetisation of Nigeria’s extensive oil and gas resources. For Gas, 76 per cent 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.
“Streamlining of Contracting Processes, Procedures and Timelines:
“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 six 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 per cent. 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.
“Implementing Partners
“A diverse array of stakeholders was consulted and provided input into. Some of these stakeholders will be responsible for implementation.
“Fiscal Incentives:
“The Minister of Finance/Co-ordinating Minister of the Economy will develop and propose amendments to introduce fiscal incentives for deep-water developments into legislation. The Federal Inland Revenue Service (FIRS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will issue guidelines on the implementation of the fiscal incentives.
“Streamlining of Contracting Processes, Procedures and Timelines:
“The MOFI, MOPI, Nigerian Content Monitoring and Development Board, NNPCL will be responsible for implementation and enforcement.
“Local Content Practice Reform:
“The NCDMB is responsible for implementing the Directive and issuing supporting guidelines.
“Details on the role of each stakeholder are contained in the Policy Directives, which have been Gazetted and will be distributed shortly.
“Co-ordination
“The Special Adviser to the President on Energy to play a coordinating role in ensuring implementation within the timelines stipulated in the Directives. • I will follow up on implementing these directives and in return we expect the Operators to commit to their promises to make these investments.
Conclusion
“Our need to fuel economic growth at rates that significantly exceed our population growth rate has never been more urgent. The President strongly believes that private sector-led growth enabled by clear and inclusive government policies is the most enduring path to prosperity for all Nigerians. We will sustain engagement and collaboration with key investors to ensure we attract capital and capabilities to this sector to catalyse job creation, productivity, income growth across multiple sectors. This administration is laser focused on enabling transformational economic opportunities to lift millions of hardworking Nigerians out of poverty.”
Support PREMIUM TIMES’ journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
Donate
TEXT AD: Call Willie – +2348098788999
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