Emmanuel Addeh in Abuja
Despite recent ‘misunderstanding’ of the reasons for approval of offshore incentives created by the Bola Tinubu administration, Nigeria’s push to revitalise its offshore oil and gas sector is not merely an industry intervention, but a deliberate economic strategy aimed at unlocking dormant capital and accelerating national growth.
In making this case for the President, especially as it concerns the government’s offshore fiscal incentives, Special Adviser to the President on Energy, Olu Verheijen, argues that the reforms are structured as instruments for economic value creation rather than concessions to industry players.
According to her, the measures are designed to attract long-term investment, stimulate production, deepen local capacity and ultimately expand government revenues through increased activity in deepwater and offshore basins.
Indeed, Nigeria is recalibrating its energy strategy as it seeks to revive stalled offshore assets and position itself more competitively in an increasingly selective global capital market, it appears.
Tinubu’s decision to accelerate Shell’s Bonga South West deepwater project through targeted, investment-linked incentives reflects a broader effort to attract long-cycle capital capable of delivering jobs, production growth, and foreign exchange.
Interestingly, this shift forms the core argument of a recent article by Verheijen, an energy policy, titled: “Nigeria’s deep offshore moment: Why competing for capital is now an economic imperative.” In the piece, Verheijen situates Nigeria’s offshore reforms within a global investment environment where capital is available but highly disciplined.
“What Nigeria is competing for is not altruism from investors but capital that has options,” Verheijen wrote. “Countries that offer credible returns, regulatory certainty, and clear execution pathways win that capital,” she added.
Deepwater developments are among the most capital-intensive projects in the energy industry, often requiring multi-billion-dollar commitments and long development timelines. Globally, oil and gas companies have become more cautious about sanctioning new projects, prioritising assets that can deliver scale, predictable returns, and regulatory stability.
Despite Nigeria’s substantial offshore resource base, projects such as Bonga South West remained stalled for years, largely due to fiscal uncertainty and elevated policy risk. Verheijen notes that these conditions made it difficult for Nigeria to compete with peer jurisdictions offering clearer frameworks and more predictable economics.
Recent reforms appear to be shifting that dynamic. Nigeria’s crude oil production rose to approximately 1.7 million barrels per day in 2025, at times exceeding 1.8 million barrels per day, supported by improved drilling activity and increased investor engagement. For policymakers, offshore assets represent one of the few remaining avenues for scalable and sustainable production growth.
The investment community has not failed to take note of these changes. In fact, the investment community has taken note of these developments. Shell’s Global Chief Executive Officer, Wael Sawan, has publicly acknowledged President Tinubu’s role in fostering a more stable and predictable policy environment, enabling long-delayed investment decisions to move forward.
Verheijen points out that incentives should not be interpreted as concessions without value. ”When critics speak of ‘incentives’, the instinct is often to frame them as giveaways. The facts show something quite different. Incentives approved for Bonga South West are explicitly targeted, investment-linked, and conditioned on new capital and incremental production, not blanket concessions.
“The alternative to incentives is not higher revenue today; it is no investment tomorrow,” she wrote, adding that the Bonga South West framework is structured to be ring-fenced, performance-linked, and contingent on new capital and incremental output.
She further observes that global oil and gas companies are sanctioning fewer projects overall, concentrating capital on jurisdictions that demonstrate execution discipline and enforceable policy frameworks. “Capital is more mobile and more selective than in previous cycles. Projects that fail to offer credible returns, clear policy frameworks, and transparent regulatory regimes risk being bypassed.” Verheijen wrote. “Being competitive matters now more than ever,” she added.
From this perspective, the Bonga South West incentives are less an exception than a signal, demonstrating Nigeria’s willingness to adapt fiscal terms in a disciplined manner while safeguarding long-term national value. Verheijen frames the move as part of a wider reform agenda aimed at restoring investor confidence and aligning Nigeria’s offshore sector with global investment realities.
As global energy markets navigate tightening capital allocation and transition pressures, Verheijen notes that Nigeria’s ability to execute on these reforms will determine whether its offshore resources translate into tangible economic benefits.
“Execution,” she wrote, “is what will turn Nigeria’s massive resource endowment into jobs, foreign exchange, and revenues that benefit citizens.”
According to her, when the State House announced that Tinubu had approved targeted, investment-linked incentives to accelerate Shell’s Bonga South West deepwater project, it did so in the broader context of an ongoing shift in Nigeria’s energy strategy, one focused on reviving stalled offshore assets and attracting capital to deliver jobs, output, and foreign exchange.
“The deeper narrative is one of system reform and execution, not corporate benevolence. Nigeria is leveraging structural changes to create a more predictable, rule-based environment, one that signals to capital markets that policy is transparent, enforceable, and tied to measurable performance,” she argues.
In this sense, she emphasises that the Bonga South West incentives are proof points, not exceptions: they demonstrate a willingness to adapt fiscal terms in a disciplined way that protects existing revenue while unlocking new value.
“Finally, this moment must be seen as part of a broader national reform agenda, one aimed at sustainably lifting production, improving competitiveness, and enabling long-term capital flows into strategic energy assets.
“Nigeria’s evolving upstream story, evidenced by rising output and renewed investment, shows that the country can be competitive if it aligns its policies, provides regulatory clarity, and fosters investor certainty.
“Deep offshore projects have high stakes and long timelines. But in a world where capital is scarce, and energy transition pressures are real, the question is not whether Nigeria should develop these projects, but whether it can afford not to act while the window remains open,” she states.
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