President Bola Tinubu has declared that Nigeria will deploy its vast oil and gas resources to build a modern, diversified economy. Speaking at the 5th anniversary of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in Abuja, Tinubu emphasized that the government has been listening to investors' complaints about high operating costs, lengthy contracting processes, and uncertainty surrounding fiscal terms. This has led to a series of measures designed to make Nigeria more competitive for long-term capital.
The event marked five years of the Petroleum Industry Act (PIA) and the establishment of NUPRC, bringing together government officials, regulators, operators, unions, host communities, and industry groups. The theme of the event was "From Uncertainty to Stability: Unlocking the Next Phase of Investment." Tinubu cited several measures, including 2024 tax incentives and directives on local content and petroleum contracting costs and timelines, aimed at improving the business environment for investors.
According to Tinubu, the latest deep offshore incentive framework was designed to unlock up to $50 billion in new investment, starting with the Bonga Southwest project. The framework provides published criteria for qualifying projects. He noted that five years ago, the PIA brought an end to two decades of waiting, providing investors with a predictable framework and giving host communities a legal stake in the resources beneath their land.
NUPRC was created to implement the PIA, and Tinubu recognized the commission's achievements. He noted that oil and gas fields were previously losing a large share of their output to theft and vandalism, but through joint efforts, protection is now steadier and stronger. Investors who once looked elsewhere are returning, and Nigeria has been ranked Africa's leading destination for upstream investment for two years running.
Tinubu also highlighted the progress made in acreage allocation, which is now awarded through open and competitive processes. More than 170 host communities are funding schools, health centers, and other projects chosen by the communities themselves. He expressed satisfaction with the peace being built in oil-producing communities, which is based on fairness and therefore more lasting.
The Nigerian leader pointed out that the administration's objective is not to perpetuate Nigeria's dependence on petroleum but to use the sector as a catalyst for economic growth. The government aims to encourage higher investment, increased production, local content development, and compliance with work programmes. Tinubu challenged operators to reciprocate the incentives and regulatory reforms introduced by his administration.
The NUPRC's 5-year bid rounds have led to $103 billion in investment spending, with projections for further growth. The PIA has enabled investment growth in the oil sector to rise from 4% to 38%. With these achievements, the government is optimistic about the future of Nigeria's oil and gas industry and its potential to drive economic development.
Key points
- President Tinubu pledges to leverage Nigeria's oil resources to build a modern economy.
- The government has introduced several measures to improve the business environment for investors.
- The NUPRC's 5-year bid rounds have led to $103 billion in investment spending.
