FG set to unlock $10bn deep-water investment with new oil, gas tax relief package
By Seun Ibiyemi
The Nigerian government is aiming to attract $5 to $10 billion in near-term investments for deep-water offshore operations through the recently introduced tax incentives in the oil and gas sector.
This announcement was made on Thursday by the Special Adviser to the President on Energy and head of the Energy Office of the Presidency, Mrs. Olu Verheijen during a statement in Abuja.
The tax relief package features substantial exemptions for diesel, Compressed Natural Gas (CNG), and cooking gas, along with fiscal incentives designed to bolster investments in deep offshore oil and gas ventures.
Finance Minister, Wale Edun unveiled these initiatives on Tuesday, introducing the first fiscal framework for deep-water gas basin exploration since 1991.
In response to the tax incentives, Verheijen remarked, “Since the approval of Nigeria’s last deep-water project – the Egina project – in 2013, International Oil Companies operating in Nigeria have redirected over $82 billion in deep-water investments to countries they consider more competitive.
Over the coming years, they are expected to invest an additional $90 billion in developing deep-water oil and gas projects.
Our reforms aim to tap into this funding pool, targeting the unlocking of $5 billion to $10 billion in new investments in Nigeria in the near to medium term.”
The Chairman of the Oil Producers Trade Section, Osagie Okunbor also noted significant improvements in policy coordination, emphasising the positive shift in the industry landscape.
“The level of coordination and policy coherence we’re seeing today is unprecedented. The accelerated pace of reforms over the past year has renewed our interest in Nigeria.”
Similarly, Chairperson of the Petroleum Contractors Trade Section, Rosario Osobase, emphasised the positive shift in the industry.
“For the first time in a long while, we’re seeing positive momentum in our industry in Nigeria, thanks to the Presidential Directives and the government’s deliberate efforts to engage the service sector,” Osobase said.
The federal government had introduced tax reliefs for deep offshore oil and gas projects in the country as well as VAT exclusion on LPG, CNG, diesel and others.
The Ministry of Finance disclosed this via its official handle on X stating that the fiscal incentives were aimed at boosting investments in the oil and gas sector.
The orders from the Ministry are titled; Value Added Tax (VAT) Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production, in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
