The Nigerian government has announced a series of tax incentives for deepwater offshore projects in a bid to attract foreign investment and strengthen the country’s oil and gas sector.
The incentives are part of Nigeria’s fiscal reform and are aimed at making Nigeria a competitive destination for energy investment.
The Minister of Finance and Coordinating Economic Affairs, Mr. Wale Edun, said in a statement this evening, the Director of Information and Public Relations, Mr. Mohammed Manga, said the financial incentives are aimed at boosting Nigeria’s oil and gas sector.
The spokesperson said the incentives include the Value Added Tax (VAT) Amendment Order 2024 and tax incentives for deep sea oil and gas production under the Oil and Gas Companies Order 2024 (Tax Benefits, Exemptions, Exemptions etc.) It said it would include a notice of action. .
Also read: Nigeria loses N3 trillion annually due to oil tax evasion – Agbakoba
The 2024 VAT Change Order covers major energy products and infrastructure, including diesel, feedstock gas, liquefied petroleum gas (LPG), compressed natural gas (CNG), electric vehicles, liquefied natural gas (LNG) infrastructure, and clean cooking. An exemption for structures has been introduced. Device.
In addition, the Notification on Tax Incentives for Deep Offshore Oil and Gas Production provides new tax relief for deep offshore projects.
The minister said the concession is expected to attract new large investments in oil and gas and revitalize the industry.
He added that the measure is aimed at reducing the cost of living, strengthening energy security and accelerating Nigeria’s transition to cleaner energy sources.
Edun expressed optimism that the initiative would reposition Nigeria’s deepwater basin as a major destination for global oil and gas investment.
He said the reforms were part of President Bola Tinubu’s broader set of investment-driven policy initiatives in line with Policy Directive 40-42.
He said: “These reflect the administration’s strong commitment to fostering sustainable growth in the energy sector and strengthening Nigeria’s global competitiveness in oil and gas production.”
Related article: OPEC blames taxes, not Dangote refinery or oil-producing countries, for high fuel prices
With these bold initiatives, Nigeria is firmly on track to regain its position as a leader in the global oil and gas market. These financial incentives demonstrate the administration’s unwavering commitment to fostering sustainable growth, strengthening energy security, and promoting economic prosperity for all Nigerians. ”
Recently, the cost of cooking gas and other energy products has increased significantly due to currency depreciation and other inflationary pressures.
According to Business Day findings, the cost of filling a 12.5kg cylinder has risen to N16,000.
Last October, the federal government excluded value-added tax from diesel, citing rising prices and the impact on inflation. However, the exemption was only for six months and the order expired in April 2024.
With foreign direct investment (FDI) plummeting from billions of dollars to just a few million dollars, apart from cooking gas, Nigeria’s oil sector has lost its vibrancy.
Exacerbating this internal corruption are the outflows of oil majors such as Shell, ExxonMobil, Eni, and Total Energy. Once buzzing with the rhythm of pumping, it now echoes with the silence of retreat.
The pain caused by this massive theft and vandalism, as well as decades of underinvestment in infrastructure, is so severe that by April 2023, the country’s oil production will be well below 1.8 million barrels per day. It was less than 1 million barrels. Quota of oil exporting countries.
Nigeria’s oil production in August was 1.35 million barrels per day.
Oladehinde Oladipo
Dipo Oladehinde is a seasoned energy analyst with experience across Nigeria’s energy sector and relevant know-how on Nigeria’s macroeconomics. He provides a combination of market intelligence, financial analysis, industry insights, micro- and macro-level analysis of a wide range of regional and international issues, as well as information for policy-making and personal direction. It also provides a technical foundation.
