April 21, 2024

Experts react to Tinubu’s executive orders to revamp oil, gas sector

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Adebayo Obajemu

Experts in oil and gas who spoke to EnergyDay have commended President Bola Tinubu for signing the executive order to revamp oil and gas sector, but wonder how the order will translate into good fortune for the sector given bureaucratic bottleneck, corruption, insecurity and energy crisis in the country.

Speaking on the order, professor Eniola Abereoran, a petroleum engineer said it was not ” enough to sign the order, the administration must first of all work hard to remove issues and challenges working against the progress of the sector, currently we have high level of insecurity in the country, corruption has not been tackled and yet there are a host of challenges in the sector.
Corroborating the view of Abereoran, Dr. Olufemi Omoyele, of the department of Entrepreneurship at Osun State University, who is also a commentator on oil and gas, told EnergyDay that ” As commendable as the executive order is, it’s only half of the question, the critical issue is not the signing but how to remove obstacles that hinder the progress of the sector; and this calls for political will.”

Recall that recently, President Tinubu signed an Executive Order to turnaround Nigeria’s oil and gas sector.

The orders are aimed at attracting investments, optimising resources, and diversifying the nation’s economy.

Nigeria, as Africa’s largest oil producer, has long sought to leverage its vast oil and gas resources for economic development. However, challenges such as bureaucratic bottlenecks, contracting delays, and low local participation have hindered the sector’s full potential.

According to a statement by Special Adviser on Media and Publicity to the president, Ajuri Ngelale, the policy directives were crafted after extensive consultations and benchmarking with global best practices, and are designed to enhance the investment climate, positioning Nigeria as the top choice for oil and gas investments in Africa.

“Following extensive engagements, analyses, and benchmarking with other jurisdictions, the President has initiated the amendment of primary legislation to introduce fiscal incentives for oil & gas projects, reduce contracting costs and timelines, and promote cost efficiency in local content requirements. Recognising the urgency to accelerate investments,” the statement said.

The order will include the introduction of incentives to stimulate non-associated gas projects, midstream developments, and deepwater ventures.

It will mandate a reduction of the contracting cycle to expedite project timelines, now set at a swift six months.

It will also ensure the application of local content requirements to enhance local involvement without compromising investment attractiveness.

Mr Ngelale said the policy reforms were crafted in collaboration with key ministries and agencies such as the Federal Ministry of Justice, Federal Ministry of Finance, Federal Ministry of Petroleum, Federal Ministry of Budget and Economic Planning, Federal Inland Revenue Service, the Nigerian National Petroleum Company Limited, the Nigerian Upstream Petroleum Regulatory Commission, the Nigerian Midstream and Downstream Petroleum Regulatory Commission, and the Nigerian Content Development and Monitoring Board.

The reform is targeted to accelerate Nigeria’s economic growth and increase its competitiveness in the global oil and gas market.

He said the details of these executive orders will be officially announced by the Federal Ministry of Information and National Orientation, marking a significant step towards a more dynamic and efficient oil and gas sector in Nigeria.

He said the special adviser to the president on energy will oversee the implementation of these directives, further emphasising the administration’s commitment to driving sustainable growth and development in the energy industry.

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