The federal government disclosed yesterday that recent reforms introduced by President Bola Tinubu’s administration have led to the commencement of a $550 million upstream gas project, a joint initiative between the Nigerian National Petroleum Company Limited (NNPC) and TotalEnergies.
A statement from the Special Adviser on Energy to the President, Olu Verheijen, revealed that these reforms are expected to unlock an additional $2.5 billion in new investments for Nigeria’s oil and gas sector.
Verheijen made this announcement during a luncheon at the inaugural US-Nigeria Strategic Energy Dialogue, hosted by the US State Department in Washington, D.C. She emphasized that the energy reforms introduced since June 2023 aim to improve energy security, attract investment, and strengthen collaboration with key partners, including the US government.
Established in June 2023, the US-Nigeria Strategic Energy Dialogue is designed to enhance bilateral cooperation between the two nations’ governments and private sectors, advancing shared energy and climate action goals.
Nigeria’s objective is to create a robust regulatory framework that attracts new investments in gas production for power generation, transportation, and clean cooking solutions. Supporting these reforms, President Tinubu issued five new executive orders to provide fiscal incentives, reduce costs, and streamline contract processes for expanding gas infrastructure.
Verheijen emphasized that these directives are projected to unlock up to $2.5 billion in fresh investments in the oil and gas sectors. The impact is already visible, with the recent Final Investment Decision (FID) on a $550 million upstream gas project, expected to deliver 350 million standard cubic feet of gas per day once operational.
Highlighting Nigeria’s commitment to addressing its energy challenges, Verheijen stated, “This inaugural dialogue with the US is crucial for us to jointly find solutions to close the energy access gap for nearly 100 million Nigerians who still lack reliable power.”
She also outlined key reforms introduced since Tinubu took office, including initiatives to improve electricity distribution through smart metering and the resolution of outstanding debts to investors, while also reducing carbon emissions from gas production.
Verheijen expressed optimism about the future of Nigeria’s energy sector, particularly with the increased focus on gas as a transition fuel in the country’s efforts to meet its Paris Agreement commitments. “We see resilient demand for gas as a cost-effective backup to renewables while cutting emissions by half,” she added.
Assistant Secretary of the State Department’s Bureau of Energy Resources (ENR), Geoffrey Pyatt, also emphasized the importance of the dialogue, stating that the US is eager to collaborate with Nigeria on shared goals of energy security, decarbonization, and economic growth.
The Nigerian delegation, led by the Minister of State for Petroleum Resources, Ekperikpe Ekpo, included officials from various government agencies, such as the Ministry of Power, NNPC, and the Nigerian Content Development and Monitoring Board (NCDMB). The US delegation featured representatives from USAID, the Department of Energy, and the Export-Import Bank (EXIM), among others.
During the event, the US State Department launched the Clean Energy Alliance of Nigeria (CLEAN), an initiative aimed at promoting investment in clean energy solutions in Nigeria.
Responding to a recent statement from Dangote Group’s Vice President for Oil and Gas, Devakumar Edwin, about abandoning plans to build a 1,200km subsea gas pipeline, Ekpo clarified that the decision was a business move taken before Tinubu’s administration. He reaffirmed the government’s commitment to fostering an environment that encourages investments in the gas sector.
Ekpo highlighted the various policies in place to support private sector involvement in gas development, including the Gas Pricing & Domestic Demand Regulations (2023), the Nigerian Gas Transportation Network Code, and the Petroleum Industry Act (PIA) 2021, which provides incentives for private sector investments in gas infrastructure.
The Minister also stressed that the PIA established the Midstream and Downstream Gas Infrastructure Fund (MDGIF) to further promote investment in gas projects, underscoring the government’s dedication to national economic growth and development.