Olu Verheijen Urges Foreign Investment in Nigeria’s Energy Sector Amid Unprecedented Reforms

Special Adviser to the President on Energy, Olu Verheijen, has called on investors to seize new opportunities in Nigeria’s energy sector, highlighting untapped potential and recent reforms to attract capital.

Speaking to a diverse audience at the ongoing African Energy Week in Cape Town, South Africa, Verheijen underscored the untapped potential within the industry and discussed the recent reforms implemented by the President Bola Tinubu administration to attract investment. 

Verheijen, according to a release issued on Thursday by Director of Information at State House, Abuja, Abiodun Oladunjoye, stated that the country had historically underperformed in oil and gas production, despite Nigeria’s huge oil and gas endowment.

She referenced how countries like Brazil, with only about 30 per cent of Nigeria’s oil reserves, had outperformed the African giant by producing 131 per cent more than Nigeria’s current production. 

“Despite our abundant endowments, we have underperformed against our potential. For example, Brazil holds only 30 per cent of Nigeria’s oil reserves, but produces 131 per cent more. This is largely due to under-investment,” she said.

Verheijen disclosed that since 2016, Nigeria had attracted only four per cent of Africa’s oil and gas investments, while investment had surged in other, less resource-rich nations.

According to her, “Since 2016, Nigeria has managed to attract only four per cent of total investments in oil and gas, while less resourced countries in Africa have enjoyed a bigger share.

“When we analysed investment data, we also found that, between 2013, when Nigeria’s last deep-water project reached FID, and now, IOCs operating in Nigeria have committed more than $82 billion in deep-water investments in other countries that they have deemed to be more attractive destinations for their capital.”

Recognising the trend, the presidential aide highlighted many efforts by the Tinubu administration to enact reforms aimed at reshaping Nigeria’s investment landscape.

As part of the initiatives, she said the government had introduced fiscal incentives targeting deep offshore and non-associated gas projects, marking the first time Nigeria has outlined a fiscal framework specifically for deep-water gas. 

On efforts to enhance the upstream oil and gas sector, Verheijen said her office had collaborated closely with the office of the National Security Adviser to create and distribute focused security directives, leveraging insights garnered from on-ground operators. 

Additionally, Verheijen revealed steps to streamline approval processes by clearly defining the regulatory scopes involved. 

She said the initiative aimed to significantly reduce the extended project timelines that had historically plagued the industry, as well as the high-cost premiums associated with operating in Nigeria. 

She added, “Our target is to shorten the contracting timelines from an extensive 38 months to just 135 days, while also working to eliminate the 40 per cent cost premium that currently exists within the Nigerian petroleum industry.”

The presidential aide also revealed efforts by the Tinubu administration to further open up the oil and gas sector for bigger investments with a set of clear fiscal incentives for non-associated gas and deep offshore oil and gas exploration and production.

She stated, “This is the first time that Nigeria is outlining a fiscal framework for Deepwater gas since exploration in the basin commenced in 1991.”

According to her, among other initiatives, there has been a focus on midstream and downstream investments in Compressed Natural Gas, (CNG), liquefied petroleum gas, and electric vehicles as part of the Presidential Gas for Growth Initiative.

She added, “We have also introduced fiscal incentives to catalyse investments in the midstream and downstream sectors, including, Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), and mini Liquefied Natural Gas (LNG). 

“These align with the broader Presidential Gas for Growth Initiative, which seeks to enable the displacement of PMS and diesel in three key sectors: heavy transport, decentralised power generation, and cooking. These incentives are also stimulating demand for electric vehicles.

“Our goal is to eliminate the 40 per cent cost premium within the Nigerian petroleum industry and cut down contracting timelines from 38 months to 135 days.”

Verheijen stated that the government had unlocked over $1 billion across the energy value chain, with two more major investment projects expected by mid-2025.

She said, “We are also facilitating the transfer of onshore and shallow water assets to local companies with the capacity to grow production, while supporting the transition of International Oil Companies, with resilient capital, into deep offshore and integrated gas. We have unlocked over $1 billion in investments across the value chain and by the middle of 2025 we expect to see FID on two more projects, including a multibillion-dollar deep-water exploration project, which will be the first of its kind in Nigeria in over a decade – one of many to come.

Verheijen also addressed efforts by the Tinubu administration to revamp the country’s power sector, with plans to provide more reliable electricity access for the 86 million Nigerians currently underserved. 

She said the scheme aimed to improve revenue assurance and collection.

 Other key measures, according to her, include tackling legacy debt, deploying seven million smart meters to reduce losses, and expanding off-grid solutions for remote communities. 

By 2027, Nigeria aims to ensure 20 hours of electricity daily for consumers in urban areas and industrial hubs.

Highlighting recent macroeconomic reforms, such as petrol subsidy removal and foreign exchange liberalisation, Verheijen expressed confidence that Nigeria was set for unprecedented growth. 

She said, “Under President Tinubu’s leadership, Nigeria is championing reforms to unlock its vast economic potential and create jobs.”

The presidential aide invited foreign partners to participate in Nigeria’s next chapter of growth.

Deji Elumoye

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