Uche Cecil Izuora
The Federal Government has attracted investment amounting to over $500 million from January 2024 after it launched a strategic energy transition initiative through the promotion of gas as key transition fuel.
This was revealed by the Special Adviser to President Bola Tinubu on Energy, Mrs. Olu Verheijen, at the opening of the 2024 Oil and Trading Logistics Expo on Monday in Lagos.
Verheijen, represented by Mrs. Eriye Onagoruwa, said that in recognition historical challenges in the petroleum sector, President Tinubu set out with a bold reform program to address the critical issues and reposition Nigeria as a more desirable global investment destination for energy projects, and this efforts have culminated in some successes.
The Government she said has established a more transparent regulatory environment, a stable regulatory environment, and clear delineation of Agency roles which was a vital first point of reform, making the Nigerian business environment more transparent, efficient and competitive.
The Government she said also achieved this by clarifying the regulatory scope of the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure a stable and predictable regulatory environment for investors.
The Presidential aide further stated that unprecedented incentive to attract new investment and promote diversification of Nigeria’s energy portfolio, have led to the introduction of fiscal incentives to deepen the penetration of Compressed Natural Gas (CNG) Liquified Petroleum Gas (LPG ) and Liquified Natural Gas (LNG).
This incentives include waivers on import duties and Value Added Tax (VAT) on the sale and distribution of LNG, CNG and LPG, as well as associated equipment, which also cover electric vehicles, to encourage investment in this area as part of the commitment to sustainable energy transition in Nigeria.
She disclosed that the amount of investments from this initiative, from January till date, is over 500 million US dollars.
She further explained, “We have launched the Presidential CNG initiative specifically to create a CNG ecosystem capable of achieving Nigeria’s objective of transiting to cleaner transportation fuels and easing the impact of the removal of fuel subsidies in Nigeria, the CNG initiative has so far attracted over $5 million in private investments in addition to government financing.
“And today, Nigeria has more than 125 vehicle conversion facilities, up from seven in 2023.”
Olu Verheijen, spoke passionately about the use of dirty cooking fuel, as one, very important area that sometimes gets overlooked is clean cooking.
She said several millions of Nigerians particularly women and children, live with a harmful health and environmental effects of cooking with firewood and charcoal.
“For them, the very act of cooking becomes a life threatening event. For these people, we are determined to provide affordable access to clean cooking options by way of gas and electric boat, and these fiscal incentives are designed to achieve this all important goal, which is in line with the United Nations SDG, seven on creating affordable and accessible energy.” she said.
Chairman of the Advisory Board, OTL Africa Downstream Energy Week, Mr. Adetunji Oyebanji, said the 18th edition of the OTL Africa Downstream Energy Week brought together the leading minds across the energy value chain to exchange insights and ideas and to strengthen the connections that drive the industry forward.
He stated that OTL has grown into a vital platform for discourse, collaboration, and innovation within Africa’s downstream sector.
He said: “This year’s event takes place against the backdrop of two major industry milestones. First, the recent full deregulation of Nigeria’s downstream sector, along with the shift to a market-based gasoline pricing system, marks a fundamental change in our market. Deregulation introduces new opportunities for competition, transparency, and efficiency, while market-based pricing sets a pathway for stability and fair value distribution across the supply chain.”
Governor of Lagos State, Mr. Babajide Sanwo-Olu, represented by the Commissioner for Energy, Lagos State, Mr. Biodun Ogunleye said that energy transition isn’t simply replacing one energy source with another.
He opined that it is about developing an ecosystem that encompasses all elements including – exploration, production, storage and retailing.
The Minister of State for Petroleum(Oil) Heineken Lokpobiri, stated that the theme of this years’ event ‘Alliance for Growth;’ could not have been more apt at this pivotal time for the industry as the stakeholders navigate the complex dynamics in the industry and increase in the demand for technological advancement.
Chief Executive, National Petroleum Authority, Ghana, Dr. Mustapha Abdul-Hamid called for greater collaboration among stakeholders in the region and continent.
He said that Ghana uses $400m to import petroleum product monthly and therefore called for the adoption of common currency to address the exchange rate issues.
The Authority Chief Executive, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr Farouk Ahmed said the Agency is fully committed to supporting all the reform initiatives of President Tinubu in the Midstream and Downstream sector through enhanced regulatory processes including efficient issuance of licenses, permits and authorizations.
He said: “last year, the OTL conference focused on “Energy, Synergy and New Beginnings”, and we excitedly reviewed the policy direction of the present administration and the strategic realities of the industry, which include the need for wider collaborations to harness huge potentials of the Africa’s energy resource; addressing the endemic challenge of energy poverty; and the critical need for project financing to bridge the deficit in infrastructure.
“This year, the organizers of the conference have adopted the theme ‘Alliances for Growth – Markets, Operations and Policy’. The keyword ‘synergy’ in the previous theme is similar to the keyword ‘alliances’ in the current theme. This shows the continuing imperative for effective collaborations between the stakeholders of the industry.
“Strategic collaborations and alliances are indeed required for the industry to effectively surmount the emerging and conflicting challenges related to climate action, geopolitical tensions, market stability, and ever-growing energy demand.
“Within the Midstream and Downstream sector, strong collaborations are required between regulatory agencies to facilitate ease of doing business, and between businesses to pool resources required for delivering complex projects.
“It is also necessary to expand regional collaborations to enhance cross border trade; and for the industry to establish a robust mechanism for sharing of best industry practices and capacity optimization.”