In a strategic move to resolve the liquidity crisis within Nigeria’s energy value chain, the Federal Government has approved a new mechanism allowing upstream gas producers to deduct outstanding legacy debts from their royalty payments.
The Decade of Gas Coordinator, Mr. Ed Ubong, revealed this development during a high-level dialogue at the ongoing Nigeria International Energy Summit (NIES) 2026.
Mr. Ubong explained that the initiative, which received the formal nod from President Bola Ahmed Tinubu, is specifically designed to ensure that gas production remains uninterrupted.
By allowing producers to offset the money owed to them by the government against their statutory royalty obligations, the administration aims to inject much-needed liquidity back into the operations of gas suppliers.
Ubong noted that this approach, which has also been ratified by the National Economic Council, serves as a pragmatic solution to the financial bottlenecks that have historically hampered the gas-to-power sector.
Supporting the call for a more structured market, TotalEnergies Marketing Nigeria Plc emphasized that financial engineering alone will not guarantee long-term success.
During a panel session at the summit, the oil major warned that while the current deregulation of the downstream sector is a positive step, it remains fragile.
The company asserted that the market requires rigorous regulatory discipline, consistent policies, and strict safety enforcement to prevent instability.
TotalEnergies further clarified a long-standing industry narrative, stating that the exit of several multinational oil companies from Nigeria’s downstream space over the years was not caused by a lack of investment capital. Instead, the firm pointed to a history of inconsistent government policies and an uneven playing field as the primary drivers for those departures.
The company, currently the sole multinational remaining in Nigeria’s downstream sector, maintained that maintaining world-class operational standards is the only way to ensure the sustainability of the deregulated market.
This systemic shift towards a royalty-offset model, combined with calls for tighter regulation, reflects a growing consensus at NIES 2026 that Nigeria’s energy renaissance depends equally on financial transparency and unwavering policy consistency.