President Bola Tinubu has on Wednesday 6, 2024 signed executive orders introducing tax credits for some onshore and shallow-water locations and streamlining contract approvals, the government said in a statement on X. The measures also include some local-content requirements Bloomberg has reported.

Nigeria is already Africa’s largest oil producer and a member of the Organization of Petroleum Exporting Countries. The massive Dangote oil refinery — the biggest on the continent — started operations near Lagos earlier this year, and the nation’s state-owned oil company is pushing for another production line at its liquefied natural gas plant.

However, investments in its oil and gas industry have been declining. Oil majors are divesting from onshore and shallow waters where operations have been plagued by theft, vandalism and litigations related to environmental damages that have slowed production.

The incentives announced this week are meant to address holes in a landmark 2021 petroleum law. They include a “25% gas utilization investment allowance in new and ongoing projects” in the midstream sector, and measures to increase oil and gas investment in deepwater. The government also plans to raise the approval thresholds for production-sharing and joint ventures to a minimum $10 million.

Source: Bloomberg