Nigeria to Exploit $257 Billion in Gas Reserves with Tax Incentives.
Nigeria aims to boost the development of its $257 billion non-associated gas (NAG) fields through implementing tax credits, as outlined in the Nigeria Tax Bill 2024.
With an estimated 106.67 trillion cubic feet (Tcf) of NAG, which makes up 51 per cent of the nation’s total gas reserves, the proposed tax benefits under the Nigeria Tax Bill 2024 could encourage investment and expedite the development of these fields. By providing tax credits of up to $1.00 per thousand cubic feet for qualifying fields, the government seeks to stimulate gas projects, particularly in onshore and shallow water areas where infrastructure issues have hindered production.
Nigeria holds the ninth-largest gas reserves globally, estimated at around 209.26 trillion standard cubic feet (Tcf), according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). With the base price of gas in Nigeria approximately set at $2.42 per million British thermal units (MBTU), or $2,414 per million standard cubic feet (MMscf), these NAG reserves stand at roughly $257 billion.
The bill, currently under consideration by the House of Representatives, suggests a tax credit ranging from $1.00 to $0.50 per thousand cubic feet of gas sourced from non-associated gas fields. This proposal aligns with the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Executive Order signed by President Tinubu in February 2024.
Source: NEWSCENTRALAFRICA
