Nigeria is poised to unlock $10 billion in deep-water investments with its new oil and gas tax relief package. The government aims to attract $5 to $10 billion in near-term investments for deep-water offshore operations through tax incentives introduced by the Special Adviser to the President on Energy, Mrs. Olu Verheijen ¹.
These incentives include massive tax exemptions for diesel, Compressed Natural Gas (CNG), and cooking gas, as well as fiscal incentives to support investments in deep offshore oil and gas. Minister of Finance Wale Edun rolled out these measures, including the first fiscal framework for deep-water gas basin exploration since 1991.
The move is expected to reverse the trend of International Oil Companies investing in other countries deemed more competitive. Since Nigeria’s last deep-water project approval in 2013, these companies have committed over $82 billion to other nations, with plans to spend another $90 billion on deep-water oil and gas projects in the next few years ¹.
Industry leaders have welcomed the reforms, citing improved policy coordination and renewed interest in Nigeria. Osagie Okunbor, Chairman of the Oil Producers Trade Section, noted the unprecedented level of coordination, while Rosario Osobase, Chairperson of the Petroleum Contractors Trade Section, highlighted the positive momentum in the industry ¹.
This development follows President Tinubu’s range of reforms aimed at boosting Nigeria’s oil and gas industry competitiveness since taking office in May 2023. The three presidential directives issued in February 2024 are expected to generate thousands of new jobs, enhance foreign exchange earnings, and stimulate tax revenue ¹.
Additionally, ExxonMobil has announced a $10 billion investment in Nigeria’s deep-water oil operations, with Vice President Kashim Shettima welcoming the move as a clear vote of confidence in the country’s energy sector ² ³ ⁴ ⁵. This investment will focus on the Owo deep-water project and is expected to boost Nigeria’s oil output.
