July 23, 2024

Tinubu administration pledges to avoid predecessors’ error in allocation of oil, gas leases 

…as Minister of States (oil) promises to prioritize energy firms with proven capacity in oil, gas bid rounds
Oredola Adeola
The Nigerian Government has committed to avoiding the mistake of releasing the country’s oil and gas exploration and production assets to companies without the necessary funding and technical capacity to optimize these valuable resources, vowing to prioritize and consider only energy firms with proven capacity during bid rounds.
Senator Heineken Lokpobiri,  Minister of State for Petroleum (Oil), made this known at the 2023 Annual Dinner of the Independent Petroleum Producers Group (IPPG), held at the Metropolitan Club, in Lagos.
Lokpobiri in his keynote address at the event said henceforth, only energy firms with proven capacity would be prioritised and considered for award during bid rounds.
He therefore promised players in the Nigerian oil and gas industry that the present government had put an end to the era of delay of license extensions and ministerial consent.
The Minister assured the oil and gas producers of enabling fiscal and regulatory policies to attract investments into the petroleum sector and, ultimately, ramp up production.
Olu  Verheijen, Special Adviser to the President on Energy, in her special goodwill message at the event, stated that her office has since started work on key areas of reform to spur the growth of the energy sector, to positively impact the livelihood of the average Nigerian and small businesses.
He emphasised that President Tinubu is dedicated to exploring avenues for improving revenue, with the oil and gas sector playing a crucial role in this effort.
Sharing insights from recent stakeholder engagements, Ms Verheijen, revealed that the President approved an Import Duty Waiver to promote the utilization and supply of gas in the domestic market, covering equipment related to Compressed Natural Gas (CNG) and Liquified Petroleum Gas (LPG).

She said, “From my engagements with leading international and independent oil and gas companies operating in Nigeria, there are massive investment opportunities for the energy sector, estimated at $55.2 billion projected by 2030, of which $13.5 billion is expected to be invested by these companies in 12 months.”

 The Special Adviser to the President on Energy therefore assured members of IPPG and other industry stakeholders of the Federal Government’s concerted efforts to unlock investments, revamp oil and gas production, and position Nigeria as the preferred destination in Africa for the energy sector.
She mentioned that the oil and gas sector remained critical in that regard, despite current production levels falling significantly short of the country’s potential.
Abdulrazaq Isa, Chairman, IPPG, in his opening remarks, pointed out that the group’s immediate concern as a matter of urgent industry priority is the creation of a conducive and enabling business environment to enhance the competitiveness of the industry.
He said, “Attracting the level of investment required to fully optimize our production base will require us to focus on some key priorities in the short to medium term.
“Some of these include amending critical aspects of the Petroleum Industry Act (PIA) to strengthen the regulatory framework and competitiveness of the fiscal regime; enhancing security across the Niger Delta; expediting the conclusion of ongoing IOCs divestments; sustaining the implementation of the “Decade of Gas” policy.
Isa therefore charged the President to holistically address inherent inefficiencies within our industry which have driven costs to astronomical levels.