The guidelines, a cornerstone of the Presidential Directives, are aimed at enhancing the Nigerian oil & gas sector’s global competitiveness whilst stimulating economic growth. The signing of the guidelines was presided over by Minister of Finance and Coordinating Minister of the Economy, Wale Edun, at the Federal Ministry of Finance headquarters in Abuja on Tuesday.
A statement from the ministry revealed the Presidential Directives were developed and coordinated by the Special Adviser to the President on Energy, Mrs. Olu Verheijen, to ensure a competitive framework for the Nigerian oil & gas industry.
“These Consolidated guidelines for the fiscal incentives are based on extensive collaboration across Finance and Petroleum Ministries and involved several key regulatory bodies including the Federal Inland Revenue Service, the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority,” part of the statement read.
According to Verheijen, these new measures have been designed to deliver a competitive Internal Rate of Return for Oil & Gas Projects and attract over $10bn in new investments within the next 12-18 months.
“They also underscore Nigeria’s commitment to reaching its long-term oil production target of 4 million barrels per day whilst enhancing the reliability of gas supply for to boost export earnings and fuel Nigeria’s industrialisation,” she said.
Verheijen disclosed that among the guidelines signed were the NUPRC Guideline on Hydrocarbon Liquid Content in a Non-Associated Gas (NAG) Field, essential for accurately categorising and quantifying the hydrocarbon liquid content in these fields. Additional guidelines focused on the applicability of tax credits and allowances for Non-Associated Gas Greenfield Development and the Midstream Capital and Gas Utilization Allowance, providing taxpayers with clarity on the computation of these benefits.
Edun, in his remarks, thanked President Bola Tinubu for signing the directive in February 2024 to engender growth in the Nigerian oil and gas sector, which had stagnated for over the last decade. He also emphasised the potential of the guidelines, saying, “The idea is to create an atmosphere conducive to international competitiveness such that investment comes in. And in this case, we know it’s foreign direct investment.”
