•Says N700bn mobilised in 2024 to bridge Nigeria’s electricity metering gap
Emmanuel Addeh in Abuja
The Special Adviser on Energy to President Bola Tinubu, Olu Verheijen, has reaffirmed the federal government’s plan to tap from the $90 billion targeted investments in oil and projects over the next five years by the International Oil Companies (IOCs).
In a piece yesterday, in which she sought to update stakeholders on the impact of the policies of the current government on the oil industry thus far, the presidential aide disclosed that in 2024 about N700 billion was mobilised to close the country’s metering gap, stressing that over 5 million meters will be installed by 2027.
According to Verheijen, Tinubu’s energy sector reforms, which are aimed at unlocking investments that deliver energy as affordably and sustainably as possible for domestic use and export, are prompting oil companies to take a second look at Nigeria.
She listed the Tinubu administration’s overarching objectives in the sector as the elimination of wasteful petrol subsidies (which was recently achieved) and redirecting the savings to critical investments in infrastructure and social sectors as well as the restoration and growth of oil and gas production and associated fiscal income, prioritising strong economics, quick execution and low emissions.
Besides, she mentioned that deepening and diversifying the economy by shifting towards gas and scaling up on-grid electrification in Nigeria by resolving liquidity challenges and attracting new private-sector investment, remain key aims.
“When the president assumed office 19 months ago, Nigeria’s oil and condensate production was 1.2 million bpd, well below a capacity of over 2 million 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 $90 billion 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,” she added.
With three landmark presidential directives issued in February 2024, especially directive 40, she explained that 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.
She added that the office was also working with the industry regulators to achieve 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 $5 billion. These all happened within 10 months of the presidential directives.
“Total and NNPC committed to investing $500 million 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 $5 billion 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 $700 million of ongoing and prospective investment. We expect more investment decisions in the months ahead,” the special adviser noted.
The improved regulatory environment created by these reforms, she said, has also helped clear a backlog of pending regulatory approvals for divestments of onshore and shallow water operations by IOCs.
Contrary to the belief in some quarters that divestments meant IOCs were leaving Nigeria, she argued that it was not the case. Instead, she maintained that it was 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.
In the power sector, Verheijen said the new Presidential Metering Initiative (PMI) launched in 2024 represents a huge step forward. The PMI, she explained, will deploy over 5 million smart meters by 2027, bolstering revenue assurance for the entire value chain.
“In 2024, we mobilised N700 billion 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,” she averred.
