Nigeria Pushes for $10 Billion Investment with New Gas Policy Framework

Nigeria is advancing with a new policy framework aimed at revitalising its natural gas sector, seeking to attract up to $10 billion in investment.

The proposed measures offer tax incentives to entice both local and international investors to tap into the country’s deep-water gas reserves.

The framework, already approved by the Federal Executive Council, is now awaiting approval from the National Assembly. Once enacted, the policy is expected to expedite the development of Nigeria’s natural gas infrastructure.

What the Federal government is saying “The Honourable Minister of Finance and Coordinating Minister of the Economy Mr. Wale Edun has unveiled two major fiscal incentives aimed at revitalizing Nigeria’s oil and gas sector:”

• Value Added Tax (VAT) Modification Order 2024
• ”Notice of Tax Incentives for Deep Offshore Oil & Gas Production, in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.”

“The VAT Modification Order 2024 introduces exemptions on a range of key energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.”

“These measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.”

This initiative will not only speed up gas exploration and production but also support Nigeria’s shift away from a heavy reliance on fossil fuels for transportation. The government hopes this will enhance energy security and reduce dependence on imported fuels.

Nigeria’s strategic focus on natural gas is part of a wider effort to achieve long-term energy independence and economic stability. By offering tax breaks and other incentives, the government is positioning the gas sector as a key driver of growth that can create jobs, attract foreign investment, and lower the nation’s carbon emissions.

With the global trend towards cleaner energy sources, Nigeria’s focus on natural gas development is well-timed. If successful, this policy could transform the country’s energy landscape, positioning it as a leader in Africa’s emerging gas industry.

Industry observers and investors are now keenly watching to see how swiftly the new laws are enacted and how effectively they stimulate real progress.

Earlier this week, Nigeria was expected to approve the proposed $1.3 billion sale of ExxonMobil’s shallow water assets to local firm Seplat.

The transaction has faced regulatory delays for months. While selling its shallow-water assets in Nigeria, ExxonMobil is looking to boost its deep-water investments in the country.