- Nigeria is targeting $10 billion in oil and gas investments over the next 12-18 months, and new reforms are aimed at enhancing the sector’s investment climate and governance.
- The Dangote Refinery, Africa’s largest, began operations in late 2023. It positions Nigeria as a net exporter of refined petroleum products and boosts its foreign exchange earnings.
Nigeria, aiming to attract $10 billion in oil and gas investments over the next 12-18 months, has introduced a series of reforms designed to enhance the investment climate and governance within the sector.
These changes will be spotlighted at the upcoming African Energy Week: Invest in African Energy 2024 conference, where an Invest in Nigeria Energies roundtable will showcase the country’s energy sector opportunities.
The discussion will feature Nigeria’s Minister of State for Petroleum Resources, Heineken Lokpobiri; Abdulrazaq Isa, Chairman of the Independent Petroleum Producers Group of Nigeria; and Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority. The session will also include representatives from major international oil companies like ExxonMobil and Chevron.
Recent federal policies, coupled with the ongoing implementation of the Petroleum Industry Act, aim to rejuvenate Nigeria’s energy sector and reinforce its status as Africa’s leading crude oil producer. Key reforms include streamlining contracting procedures by raising approval thresholds for Production Sharing Contracts (PSCs) and Joint Operating Agreements (JOAs) to $10 million, simplifying processes, and extending third-party contracts from three to five years.
These changes are expected to accelerate project cycles, supporting Nigeria’s goal of increasing oil production to 4 million barrels daily.
Nigeria also focuses on boosting gas monetisation, refining, and infrastructure investments. New gas reforms include tax incentives for non-associated gas projects and a 25% tax deduction for qualifying equipment used in gas projects. These measures have already spurred significant investments, such as the $550 million Final Investment Decision (FID) by TotalEnergies and the Nigerian National Petroleum Corporation for the Ubeta gas field.
Gas from this field will supply the Nigeria LNG liquefaction plant, with production set to begin in 2027, supporting the country’s transition to low-cost, low-emission projects.
Nigeria has made strides in deregulation in the downstream sector to improve fuel availability and affordability, eliminate subsidies, and enhance efficiency. The recently operational Dangote Refinery, Africa’s largest capacity of 650,000 barrels per day, is expected to transform Nigeria into a net exporter of refined petroleum products. This refinery stabilises domestic fuel prices, reduces import dependency, and boosts foreign exchange earnings.
Nigeria’s policy reforms are paving the way for new investments in refining capacity, petrochemical complexes, distribution infrastructure, and gas processing and storage facilities, further supporting the country’s ambitious energy sector goals.