President Bola Tinubu’s government has promised to provide at least 20 hours of daily electricity supply to Nigerians in the urban and industrial areas by 2027.
Nonetheless, this goal has been set on the basis of adequate funding for Nigeria’s oil and gas industry, which it has indicated is presently falling short of what was anticipated.
The Special Advisor to the President on Energy, Olu Verheijen, disclosed this during the Energy Week in Cape Town, South Africa, as reported by the State House Director of Information and Publicity, Abiodun Oladunjoye, on Thursday.
“By 2027, Nigeria aims to ensure 20 hours of electricity daily for consumers in urban areas and industrial hubs,” Verheijen said.
The statement is titled, ‘At the African Energy Week in Cape Town, Olu Verheijen Encourages International Investors to Pour Money into Nigeria’s Energy Market.’
News360 Info reports that Verheijen’s remarks are made amid the frequent breakdowns of Nigeria’s national power grid, which have resulted in widespread power outages throughout the nation.
The grid failed on Tuesday, becoming the 10th such event since the start of 2024. The Federal Government has blamed these ongoing failures on old infrastructure, poor upkeep, and a lack of investment in the energy sector.
Despite having the potential to produce around 12,500 megawatts, Nigeria typically only manages to generate a small fraction of this, leaving many regions without dependable power.
During Energy Week, Verheijen briefed attendees on the Tinubu government’s efforts to rejuvenate the country’s electricity sector, with plans to deliver a more dependable power supply to the 86 million Nigerians without it.
She mentioned the strategy includes enhancing income security and collection. Other critical steps involve addressing old debts, installing seven million smart meters to cut down on losses, and expanding off-grid solutions for isolated communities.
Emphasizing recent economic reforms, such as eliminating the fuel subsidy and opening the foreign exchange market, she showed optimism that Nigeria is on the brink of significant development.
“Under President Tinubu’s leadership, Nigeria is championing reforms to unlock its vast economic potential and create jobs,” she said, inviting foreign partners to participate in Nigeria’s next chapter of growth.
Tinubu’s administration to attract investment, Verheijen noted that the country has historically underperformed in oil and gas production despite its wealth in the sector.
She referenced how countries like Brazil, which have only 30 percent of Nigeria’s oil reserves, have outperformed Nigeria by producing 131 percent more than the country’s current output.
“Despite our abundant resources, we have underperformed against our potential. For example, Brazil holds only 30 per cent of Nigeria’s oil reserves but produces 131 percent more. This is largely due to under-investment,” she said.
She lamented that since 2016, Nigeria had attracted only 4 per cent of African oil and gas investments, while investment has surged in other, less resource-rich nations.
“Since 2016, Nigeria has managed to attract only 4 per cent of total investments in oil and gas, while less-resourced countries in Africa have enjoyed a larger share.
“When we analysed investment data, we also found that, between 2013, when Nigeria’s last deepwater project reached FID, and now, International Oil Companies (IOCs) operating in Nigeria have committed more than $82bn in deepwater investments in other countries they deemed to be more attractive destinations for their capital,” she told the audience.
Tinubu Govt Making Plans To Open Up Oil And Gas Sector For Larger Investments
Acknowledging this pattern, the advisor to the president emphasized the actions taken by President Tinubu’s government to implement changes designed to transform the investment environment in Nigeria.
She pointed out the introduction of tax breaks for deep offshore and independent gas projects, which was the first time Nigeria had established a tax structure specifically for deepwater gas.
To improve the oil and gas sector at the beginning of the supply chain, she mentioned her department has worked closely with the National Security Adviser’s office to develop and share detailed Security Directives, using information from operators on the ground.
Moreover, Verheijen outlined measures to make the approval process more efficient by clearly outlining the areas covered by regulations.
This effort, she stated, is aimed at greatly reducing the lengthy project durations that have traditionally been a problem in the industry, as well as the high costs of doing business in Nigeria.
“Our target is to shorten the contracting timelines from an extensive 38 months to just 135 days while also working to eliminate the 40 percent cost premium that currently exists within the Nigerian petroleum industry,” she added.
The presidential aide also revealed efforts by the current President Tinubu administration to further open up the oil and gas sector for larger investments with a set of clear fiscal incentives for non-associated gas and deep offshore oil and gas exploration and production.
“This is the first time that Nigeria is outlining a fiscal framework for deepwater gas since exploration in the basin commenced in 1991,” she said.
According to her, amongst other initiatives, there has been a focus on midstream and downstream investments in compressed natural gas, liquefied petroleum gas, and electric vehicles as part of the Presidential Gas for Growth Initiative.
She added that the administration has also worked to streamline regulatory processes, shorten project timelines, and reduce the high-cost premium of operating in Nigeria.
“We have also introduced fiscal incentives to catalyze investments in the midstream and downstream sectors, including compressed natural gas, liquefied petroleum gas, and mini-liquefied natural gas.
“These align with the broader Presidential Gas for Growth Initiative, which seeks to enable the displacement of PMS and diesel in three key sectors: heavy transport, decentralized power generation, and cooking. These incentives also stimulate the demand for electric vehicles.
“Our goal is to eliminate the 40 percent cost premium within the Nigerian petroleum industry and cut down contracting timelines from 38 months to 135 days,” Verheijen stated.
She said the government has unlocked over $1bn across the energy value chain, with two more major investment projects expected by mid-2025.
“We are also facilitating the transfer of onshore and shallow water assets to local companies with the capacity to grow production while supporting the transition of International Oil Companies with resilient capital into deep offshore and integrated gas.
“We have unlocked over $1 billion in investments across the value chain, and by the middle of 2025, we expect to see FID on two more projects, including a multibillion-dollar deepwater exploration project, which will be the first of its kind in Nigeria in over a decade – one of many to come,” Verheijen explained.
