Stimulating growth in Nigeria’s oil & gas sector

Nigeria's President, Bola Tinubu, recently signed three executive orders aimed at transforming the country's oil and gas sector, with a specific focus on utilizing gas as a means to attain energy stability. In a recent interview on CNBC Africa, Oyeyemi Oke, a Partner at AO2 Law, delved into the details of these executive orders. The first executive order focuses on contracting procedures within the sector. It aims to streamline the process and reduce the contracting cycle from an average of two to three years down to just six months. Additionally, the threshold for entering into bid cycles has been increased from $1 million to $10 million, enabling faster contracting processes. The order also includes provisions for deemed approval, which allows operators to proceed if they do not receive timely consent from government authorities. The second executive order addresses local content requirements in the sector. It emphasizes the need for local intermediaries to possess sufficient capacity to deliver on projects, rather than simply meeting requirements on paper. To enforce this order, the Nigerian Content Monitoring Board will develop guidelines to ensure compliance. The third and perhaps most significant executive order focuses on incentives for gas projects. These incentives include tax credits for non-associated gas projects, aiming to encourage investments in the gas sector. While the content of the executive orders appears promising, the key challenge lies in their practical implementation. Oke expressed confidence in the ability to implement the executive orders successfully, citing the involvement of relevant agencies such as the Nigerian Content Board and the Federal Inland Revenue Service. However, he highlighted the importance of legislating these executive orders to solidify their impact and prevent conflicts between policy directives and existing laws. Overall, Nigeria's efforts to revamp its oil and gas sector through these executive orders signify a step towards energy stability and economic growth. The success of these initiatives will depend on effective implementation and collaboration between government agencies and industry stakeholders.