President Bola Tinubu has introduced new incentives aimed at revitalising Nigeria’s oil and gas sector, with early signs of success already attracting billions in investment commitments, according to Esili Eigbe, Director at Escape Management.
In an interview with Arise News on Monday, Eigbe discussed the impact of recent executive orders on the sector, highlighting a series of policy moves implemented throughout late 2023 and early 2024.
One key incentive, he said, “I think one of the most important for example was a tax incentive that was introduced for off-shore gas production and oil production in where ONG producers there could earn as much as 30% tax rebate on production over certain level given that they are willing to commit to FYD before Jan 29 and that has already brought that to quite a number of players already announced in FID ahead of 2029 or some point over the medium to long term as the special adviser to the president and ING matters would say they have been able to attract commitment close to about $8b that actually means alot.”
“This policy has already had a positive impact,” Eigbe explained. “We’ve seen strong commitments from major international players. For example, Specifically SHELL has committed about $5b to its bonga project total about $1billon and quite a number of others.”
In total, Eigbe noted that these incentives have spurred about $8 billion in investment commitments, a figure he said reflects growing investor confidence in Nigeria’s energy sector.
Beyond upstream developments, Eigbe said the incentives have energised downstream activity.
“it also spurred activity within the down-stream sector where we’ve seen most of the IOCs made major divestment to indigenous locals and that alone has resulted in transactions worth,i’d not of about $4-5 billon so it is very significant.”
He added that the latest directive from the Tinubu administration signals a shift toward cost discipline, enhancing Nigeria’s appeal as a globally competitive oil and gas destination.
“While the Petroleum Industry Act (PIA) was a transformative step, it failed to address the global competitiveness of Nigeria’s oil sector,” Eigbe said. “These executive orders are bridging that gap by positioning Nigeria as a more attractive investment environment.”
Turning to the issue of Nigeria’s underperforming refineries, Eigbe expressed concern over the lack of progress despite substantial investments.
He recommended the government consider selling the refineries to private investors who could restore them to operational and cost-efficient capacity. “My proposal to the government would be to find the lasting solution which would very likely include advertising selling those refineries off to the private sector investors that can efficiently bring them back if not full production at levels that are cost-competitive enough to operate.”
“The refineries haven’t met expectations, largely due to how the NNPC has managed and communicated the outlook,” he said. “Privatization could offer a sustainable solution.”
He also called for a more accountable and agile Nigerian National Petroleum Company (NNPC), urging the board to accelerate its privatisation mandate under the PIA and conduct a comprehensive audit of its assets.
“From a medium to long-term perspective, the NNPC ought to be charged with consolidating Nigeria’s oil and gas assets where they can boost production to a level that benefits every Nigerian.”
Erizia Rubyjeana
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