Olu Arowolo Verheijen, the Special Adviser on Energy to President Bola Ahmed Tinubu of Nigeria, has highlighted numerous developmental strides achieved by the Tinubu administration in Nigeria’s energy sector. She then urges oil and gas companies to take advantage of these sector reforms to prompt oil investment opportunities across the sector:

President Bola Ahmed Tinubu’s energy vision is clear and simple: Nigeria has abundant energy in all forms and must ensure that every policy and regulation is designed to unlock investments that deliver this energy as affordably and sustainably as possible, for domestic use and export.

Within weeks of assuming office in May 2023, he established a dedicated Energy Office in the Presidency – which I am privileged to lead as his special adviser – with a mandate to design and coordinate the implementation of bold reforms to reposition Nigeria as a top global investment destination.

Our overarching energy strategy consists of four primary objectives, building on the foundation of the Petroleum Industry Act (PIA) and the new Electricity Act. The first objective is to eliminate wasteful petrol subsidies and redirect the savings to critical investments in infrastructure and social sectors. The second is to restore and grow oil and gas production and associated fiscal income, prioritising strong economics, quick execution and low emissions.

Investor appetite for Nigeria

Third is the deepening and diversification of the economy by shifting towards gas, for which demand will demonstrate greater resilience through the energy transition: gas for mass electrification and transportation, displacing petrol and diesel; gas for clean cooking; and gas for manufacturing (petrochemicals, fertiliser and other industrial raw materials). The fourth objective is to scale up on-grid electrification in Nigeria by resolving liquidity challenges and attracting new private-sector investment.

When the president assumed office 19 months ago, Nigeria’s oil and condensate production was 1.2m bpd, well below a capacity of over 2m bpd. For years, despite having the largest reserves of oil and gas in Africa, we have endured being overlooked by investors who readily deployed capital to other countries deemed more fiscally attractive.

To urgently improve investor appetite for Nigeria and attract a portion of the over $90bn in planned investments in oil and projects over the next five years, we held extensive engagements with leading investors, from which it emerged that Nigeria needed to roll out compelling investment incentives.

In designing incentives, we prioritised speed, protection of existing revenues, and ease of implementation. Guided by these principles, three landmark presidential directives – directives 40, 41 and 42 – were issued in February 2024, after months of work with private and public sector stakeholders.

Through directive 40, Nigeria now has, for the first time in history, a competitive fiscal framework for non-associated gas and deepwater gas, and much more competitive fiscal terms for the exploration and production of oil. This was followed by additional incentives in October 2024, to support investments in electric mobility and midstream and downstream infrastructure to increase the penetration of LPG, CNG, and mini-LNG.

Coordination within the government

Complementing these is the ease-of-doing-business focus of directives 41 and 42, which have set us on the path to growing oil and gas revenues through lower costs and faster execution.

Additionally, we have done a lot to improve coordination within the government, working with a wide range of stakeholders including the Office of the National Security Advisers (ONSA), cabinet ministers, heads of regulatory agencies, and others, to forge the needed solutions. With ONSA we collaborated to issue a series of data-driven directives that have helped improve the security of critical transport infrastructure like the Trans Niger Pipeline in the eastern Niger Delta.

Working with the industry regulators, we achieved proper delineation and clarification of regulatory scope for each entity, minimising turf overlaps and accelerating decision-making.

The results have been swift and compelling. Nigeria has since moved to the top quartile, in terms of competitive returns, among 14 indexed countries competing for deep offshore investments. The country accounted for three out of the four Final Investment Decisions (FIDs) recorded across Africa in 2024, with a combined value exceeding $5bn. These all happened within 10 months of the presidential directives.

Total and NNPC committed to investing $500m in a gas project on the Ubeta field that was discovered in 1965; while Shell, Total, ENI, and Exxon delivered the standout highlight of 2024, a $5bn commitment to the Bonga North project, which will increase Nigeria’s production by 110,000 barrels a day. Across the energy transition value chain – CNG, LPG and electric mobility – we have already identified $700m of ongoing and prospective investment. We expect more investment decisions in the months ahead.

The improved regulatory environment created by these reforms has also helped clear a backlog of pending regulatory approvals for divestments of onshore and shallow water operations by IOCs. Some observers erroneously misread these divestments as an exit by the IOCs from Nigeria, but this is not the case. Instead, it is a strategic shift towards larger-scale deepwater projects, freeing up the onshore fields for investment by a new generation of ambitious local companies enthusiastic to grow production.

Backbone of energy security vision

We have a situation in which everyone wins; the IOCs can concentrate on the deepwater fields where they have the needed experience and enthusiasm, the independents can build their expertise on these onshore and shallow water projects, and Nigeria benefits from increased production in as many fields as possible.

It must be pointed out that gas represents the backbone of our energy security vision for Nigeria. With oil, it is a race against time to derive maximum economic benefit from an abundant resource endowment – as its era of dominance gradually winds down.

The year 2024 also saw significant progress in refining in Nigeria, with the commencement of petrol production by the new Dangote Refinery, and the revival of operations at the Port Harcourt and Warri refineries. These are still early days, as these refineries progressively ramp up production levels, but we are well on track to achieve the long-desired self-sufficiency in petroleum products.

These investments are not an end in themselves. Every dollar of new brownfield and greenfield oil and gas investment represents jobs, new technical skills for our young people, economic dividends in host communities, and much-needed foreign exchange. Just as importantly, our focus on unlocking our abundant gas represents a determination to advance the energy transition, in line with our Paris Agreement commitments.

In the power sector, the new Presidential Metering Initiative (PMI) launched in 2024 represents a huge step forward. The PMI will deploy over 5m smart meters by 2027, bolstering revenue assurance for the entire value chain. In 2024, we mobilised N700bn in new investments to support the initiative and bridge Nigeria’s metering gap.

We are also working on settling the legacy debts burdening the power sector, discouraging new investment. Another critical effort is the introduction of electricity tariffs that reflect the true cost of providing power, while also striving for affordability by protecting the most vulnerable Nigerians with targeted support. By unlocking cost-reflective, reliable and affordable power, we will be setting the stage for a surge in standards of living, and unprecedented entrepreneurship and wealth creation.

All the efforts I have outlined above are by no means an exhaustive list of President Tinubu’s energy reforms. Across the various energy value chains, the dots are all finally joining up. No one expects any less from the administration of President Tinubu, a man with considerable professional experience in the oil and gas sector.

As 2025 kicks off, the reforms will gain even greater momentum and deliver more transformational outcomes. This is what we owe present and future generations of Nigerians, who deserve a country that has the capacity and drive to use its abundant resources to guarantee enduring prosperity for all.

Olu Arowolo Verheijen is the Special Adviser on Energy to President Bola Ahmed Tinubu of Nigeria