Nigeria Offers Deepwater-Oil Tax Breaks to Lure $50 Billion

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessNigeria Offers Deepwater-Oil Tax Breaks to Lure $50 BillionNigeria announced sweeping tax incentives to attract as much as $50 billion of investment in deepwater-oil and gas projects and revive capital-intensive projects that have stalled for decades.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Nigeria announced sweeping tax incentives to attract as much as $50 billion of investment in deepwater-oil and gas projects and revive capital-intensive projects that have stalled for decades.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountPresident Bola Tinubu on Aug. 6 signed an executive order granting tax credits of as much as $11.50 per barrel of crude for new deepwater developments, starting with Shell Plc’s Bonga Southwest Aparo project, confirming earlier Bloomberg reporting. It also provides a credit of as much as $8 per barrel of oil equivalent for non-associated gas projects.The incentives will remain in place until Dec. 31, 2029, the presidency said in a statement Tuesday.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againTinubu has made reviving Nigeria’s oil and gas industry a key priority since taking office in May 2023, seeking to reverse years of declining investment and production in a sector hobbled by crude theft, pipeline vandalism and aging infrastructure.Demand for new energy sources has grown since the US-Iran war closed the Strait of Hormuz, through which 20% of the world’s oil and liquefied natural gas normally flows. The executive order reflects Nigeria’s commitment to building an investment environment defined by clear rules, strong institutions and enduring partnerships, Tinubu said.A significant part of the order is the so-called profit oil reset. It allows new projects within certain mature fields to start from a more favorable 70:30 contractor-government profit split, “thereby materially improving project economics and investment returns,” said Emmanuel Ifeanyi, senior associate on energy at Andersen in Nigeria.“That said, the ultimate verdict on the order will depend on whether it generates genuinely incremental investment and new production, rather than simply granting additional benefits to projects that would have proceeded regardless,” he said.Africa’s largest oil producer’s most significant deepwater projects like Shell’s Bonga Southwest and Exxon Mobil Corp.’s Owowo field, have been stranded for decades as the firms weighed the risks of regulatory uncertainties on such huge commitments. The Bonga Southwest project is expected to attract $20 billion in foreign direct investment and produce 150,000 barrels a day upon completion, Nigeria’s state oil company said in March.“The incentives makes deep-offshore blocks that were not being developed now bankable,” said Julius Rone, chief executive officer of UTM Offshore Ltd., a company that’s nearing the development of a $3 billion floating LNG plant in Nigeria.The company remains on course to reach a final investment decision before year end to “seize this opportunity and achieve more with the project,” Rone said.Sign up here for the daily Next Africa newsletter and subscribe to the Next Africa podcast on Apple, Spotify or anywhere you listen.(Adds President Tinubu’s X post and updates throughout)This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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