Nigeria’s President Issues Policy Directives on Non-Associated Gas Investment, Contracting Cycle Timeline, Local Content and New Deepwater Developments - Africa’s premier report on the oil, gas and energy landscape.

Nigeria’s President Issues Policy Directives on Non-Associated Gas Investment, Contracting Cycle Timeline, Local Content and New Deepwater Developments

The office of Nigeria’s president, Bola Ahmed Tinubu, says the President has initiated the amendment of primary legislation to introduce fiscal incentives for oil and gas projects, reduce contracting costs and timelines, and promote cost efficiency in local content requirements.

This action, “follows the extensive engagements as well as analyses, and benchmarking with other jurisdictions” , the statement explains.

In issuing these directives, Mr. Tinubu is responding to industry concerns around a range of investment hinderances, inducing low development of non-associated gas reservoirs and dwindling execution capacity of projects, the latter being a result of the unintended consequences of aggressive implementation of the local content policy, which has pushed away the major international service providers with deep research and development capabilities.

The Nigerian government has also been engaged in drawn out discussions on new investments in the deepwater terrain, as the authorities have sought to increase the government’s revenue, while the oil majors have pushed back, insisting on extensive revision of fiscal terms and, in cases, return to some aspects of the 1991 sweetheart deal, as the basis for their return to sweat the deepwater asset in the country.

The details of these Policy Directives, the implementation of which the Special Adviser to the President on Energy has been directed to continue coordinating, “will be gazetted and communicated by the Federal Ministry of Information and National Orientation”.

The directives are in the following areas:

(1) ⁠Introduction of fiscal incentives for non-associated gas, midstream and deepwater developments.

(2) ⁠Streamlining of contracting process to compress the contracting cycle to six months.

(3) ⁠The application of the local content requirements without hindering investments or the cost competitiveness.

“These incentives were developed in collaboration with the Federal Ministry of Justice, Federal Ministry of Finance, Federal Ministry of Petroleum, Federal Ministry of Budget and Economic Planning, Federal Inland Revenue Service, the Nigerian National Petroleum Company Limited, the Nigerian Upstream Petroleum Regulatory Commission, the Nigerian Midstream and Downstream Petroleum Regulatory Commission, and the Nigerian Content Development and Monitoring Board”, the President’s statement added.

“The Special Adviser to the President on Energy has been directed to continue coordinating the aforementioned stakeholders to ensure the implementation of these directives within a stipulated timeframe”.

This is a developing story with fuller details here.

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